Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Modify Nasdaq's Order Routing Rule, 61797-61799 [2010-25107]

Download as PDF Federal Register / Vol. 75, No. 193 / Wednesday, October 6, 2010 / Notices better than market makers, the Exchange does not believe it is necessary to impose the Rule’s restrictions on the entry of broker-dealer orders. The Exchange believes that the elimination of these restrictions will permit entities other than market makers to enter orders on both sides of the market more freely, resulting in more orders on the ISE book and therefore increase liquidity on the ISE market, all to the benefit of investors. B. Self-Regulatory Organization’s Statement on Burden on Competition The proposed rule change does not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. mstockstill on DSKH9S0YB1PROD with NOTICES C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any unsolicited written comments from members or other interested parties. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not significantly affect the protection of investors or the public interest, does not impose any significant burden on competition, and, by its terms, does not become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) 13 of the Act and Rule 19b– 4(f)(6) 14 thereunder. The Exchange provided the Commission with written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing the proposed rule change. At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend 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 U.S.C. 78s(b)(3)(A). 14 17 CFR 240.19b–4(f)(6). 19:00 Oct 05, 2010 Jkt 223001 BILLING CODE 8010–01–P • 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–ISE–2010–95 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–ISE–2010–95. 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,15 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 Web site viewing and printing 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–ISE–2010–95 and should be submitted on or before October 27, 2010. PO 00000 Frm 00106 Fmt 4703 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.16 Florence E. Harmon, Deputy Secretary. [FR Doc. 2010–25068 Filed 10–5–10; 8:45 am] Electronic Comments 15 The text of the proposed rule change is available on the Commission’s Web site at https:// www.sec.gov/rules/sro.shtml. 13 15 VerDate Mar<15>2010 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: 61797 Sfmt 4703 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–63022; File No. SR– NASDAQ–2010–116)] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Modify Nasdaq’s Order Routing Rule September 30, 2010. 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 September 27, 2010, The NASDAQ Stock Market LLC (‘‘Nasdaq’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change as described in Items I and II, which Items have been prepared by Nasdaq. 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 Nasdaq is filing a proposal for the NASDAQ Options Market (‘‘NOM’’ or ‘‘Exchange’’) to modify Chapter VI, Section 11 of the NOM rules, to add a new order routing option and to assign a name to the existing routing option. The text of the proposed rule change is available from Nasdaq’s Web site at https://nasdaq.cchwallstreet.com, at Nasdaq’s principal office, 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 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 16 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 E:\FR\FM\06OCN1.SGM 06OCN1 61798 Federal Register / Vol. 75, No. 193 / Wednesday, October 6, 2010 / Notices the most significant aspects of such statements. mstockstill on DSKH9S0YB1PROD with NOTICES A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Nasdaq is amending Section 11, Order Routing, of Chapter VI of the NOM rules which describes NOM’s order routing processes, to add a new routing option, and to assign the name ‘‘SEEK’’ to the existing routing option. Currently SEEK, the only routing option available through NOM, is described in Section 11(a) of Chapter VI. NOM is now proposing to replace this existing language with text describing new, separately named routing options, including SEEK. The proposed change to introduce the SRCH routing option will provide market participants additional tools with which to manage their order flow. Routing options may be combined with all available order types and times-in-force, with the exception of order types and times-in-force whose terms are inconsistent with the terms of a particular routing option. The routing options are described below. Section 11(a)(1)(A) provides a description of SEEK which is the Exchange’s existing, unnamed order routing option. Section 11(a)(1)(A) also specifically assigns the name SEEK to this existing routing option. Pursuant to this option, an order first checks the System for available contracts for execution. After checking the System for available contracts, orders are sent to other available market centers for potential execution, per the entering firm’s instructions. When checking the book, the System seeks to execute at the price at which it would send the order to a destination market center. If contracts remain un-executed after routing, they are posted on the book. Once on the book, should the order subsequently be locked or crossed by another market center, the System does not route the order to the locking or crossing market center. The SEEK option is valuable to Participants interested in executing as many contracts as possible upon submission of the order to the Exchange. After executing on the Exchange and routing to other destinations, any remaining unfilled portion will rest passively on the Exchange book regardless of whether the order is subsequently locked or crossed by another options exchange. This provides participants with the ability to aggressively seek available liquidity in the marketplace while also allowing the participant to VerDate Mar<15>2010 19:00 Oct 05, 2010 Jkt 223001 set the new market price (once available liquidity has been exhausted in the marketplace) and avoid re-routing the order, potentially reducing the fees paid by the participant. The SRCH routing option operates in the same manner as SEEK except that if the order is not completely executed after routing and is then posted on the Exchange book, if another options exchange subsequently locks or crosses the limit price of the order, it will reroute. Similarly to SEEK, the SRCH option is valuable to Participants interested in executing as many contracts as possible upon submission of the order to the Exchange. However, there may be times that participants wish to execute against any available liquidity that may exist in the marketplace after the order has been posted, regardless of other drawbacks associated with re-routing, in which case the SRCH routing option better fits the participant’s needs. Pursuant to Section 11(c) of Chapter VI, orders sent by the System pursuant to the SEEK and SRCH routing options to other markets would not retain time priority with respect to other orders in the System. If an order routed pursuant to SEEK or SRCH is subsequently returned, in whole or in part, that order, or its remainder, will receive a new time stamp reflecting the time of its return to the System. Nasdaq is also deleting language from subsection 11(a) of Chapter VI, which describes existing order routing processes. This language is no longer necessary because it would be duplicative of the SEEK rule language. Nasdaq is also amending Section 11 to include a definition of ‘‘System routing table,’’ defined as the proprietary process for determining the specific trading venues to which NOM routes orders and the order in which it routes them.3 The definition reflects the fact that NOM, like other trading venues, maintains different routing tables for different routing options and modifies them on a regular basis to reflect assessments about the destination markets. Such assessments consider factors such as a destination’s latency, fill rates, reliability, and cost. Accordingly, the definition specifies that NOM reserves the right to maintain a different routing table for different routing options and to modify routing tables at any time without notice. All routing complies with Chapter XII of the NOM rules, the Options Order 3 Nasdaq has previously defined the term ‘‘System routing table’’ in connection with the Nasdaq Stock Market. See Securities Exchange Act Release No. 34–61460 (February 1, 2010), 75 FR 6077 (February 5, 2010) (SR–NASDAQ–2010–018). PO 00000 Frm 00107 Fmt 4703 Sfmt 4703 Protection and Locked and Crossed Market Rules. Use of the various NOM routing options is purely voluntary. Market Participants wishing to use a NOM routing option must provide the Exchange with instructions specifying the option they wish to use. If no instructions are provided, the Exchange will not route on behalf of the participant. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act 4 in general, and furthers the objectives of Section 6(b)(5) of the Act 5 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. The Exchange believes that the proposed change to introduce the new routing options will provide market participants with greater flexibility and success in managing and executing order flow while also minimizing trading costs. 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 written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act 6 and Rule 19b– 4(f)(6) thereunder.7 4 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). 6 15 U.S.C. 78s(b)(3)(A). 7 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6) requires a self-regulatory organization to give 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, or such shorter time as designated by the Commission. Nasdaq has satisfied this requirement. 5 15 E:\FR\FM\06OCN1.SGM 06OCN1 mstockstill on DSKH9S0YB1PROD with NOTICES Federal Register / Vol. 75, No. 193 / Wednesday, October 6, 2010 / Notices A proposed rule change filed pursuant to Rule 19b–4(f)(6) under the Act 8 normally does not become operative for 30 days after the date of its filing. However, Rule 19b–4(f)(6) permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. Nasdaq requests that the Commission waive the 30-day operative delay. Nasdaq requests this waiver because it currently has the technological changes ready to support the proposed rule change, and believes that the benefits of greater flexibility that are expected from the rule change should not be delayed. The Exchange believes that the rule change is designed to provide market participants with an additional choice when availing themselves of NOM’s order routing and execution services. By offering an additional routing option, Nasdaq hopes to benefit market participants and their customers by allowing them greater flexibility in their efforts to fill orders and minimize trading costs. Nasdaq provides these services in a highly competitive market in which participants may avail themselves of a wide variety of routing options. In such an environment, system enhancements such as the changes proposed in this rule filing do not burden competition, because they can succeed in attracting order flow to NOM only if they offer investors higher quality and better value than services offered by others. Encouraging competitors to provide higher quality and better value is the essence of a wellfunctioning competitive marketplace. The Exchange also believes that immediate effectiveness of this proposed rule change is especially appropriate given that routing through NOM is purely optional. Market participants have the flexibility to mark their orders as not available for routing. If there is no benefit to the new routing strategy, market participants will simply not use it. The Exchange will not apply the new order routing strategy to market participants’ orders without their positive consent. In fact, market participants would have to make programming changes to adopt the new routing strategy and would need to do nothing if they chose not to adopt it. The Commission believes that waiving the 30-day operative delay 9 is consistent with the protection of investors and the public interest and 8 17 CFR 240.19b–4(f)(6). purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 9 For VerDate Mar<15>2010 19:00 Oct 05, 2010 Jkt 223001 designates the proposal operative upon filing. At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend 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 rulecomments@sec.gov. Please include File Number SR–NASDAQ–2010–116 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–NASDAQ–2010–116. 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 Web site viewing and printing 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 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 PO 00000 Frm 00108 Fmt 4703 Sfmt 4703 61799 submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File No. SR–NASDAQ– 2010–116 and should be submitted on or before October 27, 2010. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.10 Florence E. Harmon, Deputy Secretary. [FR Doc. 2010–25107 Filed 10–5–10; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–63024; File No. SR–Phlx– 2010–134] Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by NASDAQ OMX PHLX, LLC Relating to Exchange Disseminated Quotations September 30, 2010. 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 September 29, 2010, 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 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 Exchange Rules 1017, Openings in Options, and 1082, Firm Quotations, to reflect a system change to modify the manner in which the PHLX XL® automated options trading system 3 disseminates quotations when (i) there is an opening imbalance in a particular series, and (ii) there is a Quote Exhaust (as described below) or a Market 10 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 This proposal refers to ‘‘PHLX XL’’ as the Exchange’s automated options trading system. In May 2009 the Exchange enhanced the system and adopted corresponding rules referring to the system as ‘‘Phlx XL II.’’ See Securities Exchange Act Release No. 59995 (May 28, 2009), 74 FR 26750 (June 3, 2009) (SR–Phlx–2009–32). The Exchange intends to submit a separate technical proposed rule change that would change all references to the system from ‘‘Phlx XL II’’ to ‘‘PHLX XL’’ for branding purposes. 1 15 E:\FR\FM\06OCN1.SGM 06OCN1

Agencies

[Federal Register Volume 75, Number 193 (Wednesday, October 6, 2010)]
[Notices]
[Pages 61797-61799]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-25107]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63022; File No. SR-NASDAQ-2010-116)]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
To Modify Nasdaq's Order Routing Rule

September 30, 2010.
    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 September 27, 2010, The NASDAQ Stock Market LLC (``Nasdaq'') 
filed with the Securities and Exchange Commission (``SEC'' or 
``Commission'') the proposed rule change as described in Items I and 
II, which Items have been prepared by Nasdaq. 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.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Nasdaq is filing a proposal for the NASDAQ Options Market (``NOM'' 
or ``Exchange'') to modify Chapter VI, Section 11 of the NOM rules, to 
add a new order routing option and to assign a name to the existing 
routing option.
    The text of the proposed rule change is available from Nasdaq's Web 
site at https://nasdaq.cchwallstreet.com, at Nasdaq's principal office, 
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 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

[[Page 61798]]

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
    Nasdaq is amending Section 11, Order Routing, of Chapter VI of the 
NOM rules which describes NOM's order routing processes, to add a new 
routing option, and to assign the name ``SEEK'' to the existing routing 
option. Currently SEEK, the only routing option available through NOM, 
is described in Section 11(a) of Chapter VI. NOM is now proposing to 
replace this existing language with text describing new, separately 
named routing options, including SEEK. The proposed change to introduce 
the SRCH routing option will provide market participants additional 
tools with which to manage their order flow. Routing options may be 
combined with all available order types and times-in-force, with the 
exception of order types and times-in-force whose terms are 
inconsistent with the terms of a particular routing option. The routing 
options are described below.
    Section 11(a)(1)(A) provides a description of SEEK which is the 
Exchange's existing, unnamed order routing option. Section 11(a)(1)(A) 
also specifically assigns the name SEEK to this existing routing 
option. Pursuant to this option, an order first checks the System for 
available contracts for execution. After checking the System for 
available contracts, orders are sent to other available market centers 
for potential execution, per the entering firm's instructions. When 
checking the book, the System seeks to execute at the price at which it 
would send the order to a destination market center. If contracts 
remain un-executed after routing, they are posted on the book. Once on 
the book, should the order subsequently be locked or crossed by another 
market center, the System does not route the order to the locking or 
crossing market center. The SEEK option is valuable to Participants 
interested in executing as many contracts as possible upon submission 
of the order to the Exchange. After executing on the Exchange and 
routing to other destinations, any remaining unfilled portion will rest 
passively on the Exchange book regardless of whether the order is 
subsequently locked or crossed by another options exchange. This 
provides participants with the ability to aggressively seek available 
liquidity in the marketplace while also allowing the participant to set 
the new market price (once available liquidity has been exhausted in 
the marketplace) and avoid re-routing the order, potentially reducing 
the fees paid by the participant.
    The SRCH routing option operates in the same manner as SEEK except 
that if the order is not completely executed after routing and is then 
posted on the Exchange book, if another options exchange subsequently 
locks or crosses the limit price of the order, it will re-route. 
Similarly to SEEK, the SRCH option is valuable to Participants 
interested in executing as many contracts as possible upon submission 
of the order to the Exchange. However, there may be times that 
participants wish to execute against any available liquidity that may 
exist in the marketplace after the order has been posted, regardless of 
other drawbacks associated with re-routing, in which case the SRCH 
routing option better fits the participant's needs.
    Pursuant to Section 11(c) of Chapter VI, orders sent by the System 
pursuant to the SEEK and SRCH routing options to other markets would 
not retain time priority with respect to other orders in the System. If 
an order routed pursuant to SEEK or SRCH is subsequently returned, in 
whole or in part, that order, or its remainder, will receive a new time 
stamp reflecting the time of its return to the System.
    Nasdaq is also deleting language from subsection 11(a) of Chapter 
VI, which describes existing order routing processes. This language is 
no longer necessary because it would be duplicative of the SEEK rule 
language.
    Nasdaq is also amending Section 11 to include a definition of 
``System routing table,'' defined as the proprietary process for 
determining the specific trading venues to which NOM routes orders and 
the order in which it routes them.\3\ The definition reflects the fact 
that NOM, like other trading venues, maintains different routing tables 
for different routing options and modifies them on a regular basis to 
reflect assessments about the destination markets. Such assessments 
consider factors such as a destination's latency, fill rates, 
reliability, and cost. Accordingly, the definition specifies that NOM 
reserves the right to maintain a different routing table for different 
routing options and to modify routing tables at any time without 
notice. All routing complies with Chapter XII of the NOM rules, the 
Options Order Protection and Locked and Crossed Market Rules.
---------------------------------------------------------------------------

    \3\ Nasdaq has previously defined the term ``System routing 
table'' in connection with the Nasdaq Stock Market. See Securities 
Exchange Act Release No. 34-61460 (February 1, 2010), 75 FR 6077 
(February 5, 2010) (SR-NASDAQ-2010-018).
---------------------------------------------------------------------------

    Use of the various NOM routing options is purely voluntary. Market 
Participants wishing to use a NOM routing option must provide the 
Exchange with instructions specifying the option they wish to use. If 
no instructions are provided, the Exchange will not route on behalf of 
the participant.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \4\ in general, and furthers the objectives of Section 
6(b)(5) of the Act \5\ 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. 
The Exchange believes that the proposed change to introduce the new 
routing options will provide market participants with greater 
flexibility and success in managing and executing order flow while also 
minimizing trading costs.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78f(b).
    \5\ 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 written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \6\ and Rule 19b-
4(f)(6) thereunder.\7\
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give 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, or such shorter time as designated by the Commission. 
Nasdaq has satisfied this requirement.

---------------------------------------------------------------------------

[[Page 61799]]

    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \8\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6) permits the Commission to 
designate a shorter time if such action is consistent with the 
protection of investors and the public interest. Nasdaq requests that 
the Commission waive the 30-day operative delay. Nasdaq requests this 
waiver because it currently has the technological changes ready to 
support the proposed rule change, and believes that the benefits of 
greater flexibility that are expected from the rule change should not 
be delayed.
---------------------------------------------------------------------------

    \8\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    The Exchange believes that the rule change is designed to provide 
market participants with an additional choice when availing themselves 
of NOM's order routing and execution services. By offering an 
additional routing option, Nasdaq hopes to benefit market participants 
and their customers by allowing them greater flexibility in their 
efforts to fill orders and minimize trading costs. Nasdaq provides 
these services in a highly competitive market in which participants may 
avail themselves of a wide variety of routing options. In such an 
environment, system enhancements such as the changes proposed in this 
rule filing do not burden competition, because they can succeed in 
attracting order flow to NOM only if they offer investors higher 
quality and better value than services offered by others. Encouraging 
competitors to provide higher quality and better value is the essence 
of a well-functioning competitive marketplace.
    The Exchange also believes that immediate effectiveness of this 
proposed rule change is especially appropriate given that routing 
through NOM is purely optional. Market participants have the 
flexibility to mark their orders as not available for routing. If there 
is no benefit to the new routing strategy, market participants will 
simply not use it. The Exchange will not apply the new order routing 
strategy to market participants' orders without their positive consent. 
In fact, market participants would have to make programming changes to 
adopt the new routing strategy and would need to do nothing if they 
chose not to adopt it.
    The Commission believes that waiving the 30-day operative delay \9\ 
is consistent with the protection of investors and the public interest 
and designates the proposal operative upon filing.
---------------------------------------------------------------------------

    \9\ For purposes only of waiving the 30-day operative delay, the 
Commission has considered the proposed rule's impact on efficiency, 
competition, and capital formation. See 15 U.S.C. 78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend 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-NASDAQ-2010-116 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-NASDAQ-2010-116. 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 Web site 
viewing and printing 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 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 No. SR-NASDAQ-
2010-116 and should be submitted on or before October 27, 2010.
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    \10\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-25107 Filed 10-5-10; 8:45 am]
BILLING CODE 8010-01-P
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