Self-Regulatory Organizations; NASDAQ Stock Market LLC; Order Approving a Proposed Rule Change To Adopt a Definition of Professional and Require That All Professional Orders Be Appropriately Marked, 62443-62444 [2010-25420]
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Federal Register / Vol. 75, No. 195 / Friday, October 8, 2010 / Notices
of the Act 14 in general, and furthers the
objectives of Section 6(b)(5) of the Act 15
in particular, in that it is designed to
prevent fraudulent and manipulative
acts and practices, to promote just and
equitable principles of trade, to foster
cooperation and coordination with
persons engaged in facilitating
transactions in securities, and to remove
impediments to and perfect the
mechanisms 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 this proposal is in keeping with
those principles by providing data that
is administrative in nature or that is
used to attract liquidity to the Exchange
in response to an auction.
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 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, if
consistent with the protection of
investors and the public interest, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 16 and Rule 19b–4(f)(6) 17
thereunder.
The Exchange has asked the
Commission to waive the 30-day
operative delay and designate the
proposed rule change to become
operative during the week of October
11, 2010. The Exchange has represented
that it is important to the Exchange’s
14 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
16 15 U.S.C. 78s(b)(3)(A).
17 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. The Exchange has satisfied this
requirement.
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internal technology roll-out to be able to
have SQF 6.0 in place by this time in
order for other technological plans to be
implemented. The Exchange has also
represented that the proposed rule
change is a non-controversial system
change to data and would not affect the
execution of trades. The Exchange has
argued that the prompt implementation
of the proposal would extend the
benefits and new features of SQF 6.0 to
its users promptly. On the basis of the
Exchange’s representations, the
Commission believes that waiving the
30-day operative delay is consistent
with the protection of investors and the
public interest. Therefore, the
Commission designates the proposed
rule change as operative on October 11,
2010.18
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–Phlx–2010–124 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–2010–124. 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 website (https://www.sec.gov/
rules/sro.shtml). Copies of the
18 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).
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62443
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 website 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–Phlx–2010–124 and should
be submitted on or before October 29,
2010.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–25395 Filed 10–7–10; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–63028; File No. SR–
NASDAQ–2010–099]
Self-Regulatory Organizations;
NASDAQ Stock Market LLC; Order
Approving a Proposed Rule Change To
Adopt a Definition of Professional and
Require That All Professional Orders
Be Appropriately Marked
October 1, 2010.
I. Introduction
On August 6, 2010, The NASDAQ
Stock Market (‘‘NASDAQ’’), 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 Chapter I, Section 1
(Definitions) of the rules of the Nasdaq
Options Market (‘‘NOM’’) to adopt a
definition of ‘‘Professional’’ and require
that all Professional orders be
appropriately marked by NOM
19 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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62444
Federal Register / Vol. 75, No. 195 / Friday, October 8, 2010 / Notices
Participants (‘‘NOM Rules’’). The
proposed rule change was published for
comment in the Federal Register on
August 20, 2010.3 The Commission
received no comment letters on the
proposed rule change. This order
approves the proposed rule change.
II. Description
Under the proposal, new Chapter I,
Section 1(a)(48) will state that the term
‘‘Professional’’ means any person or
entity that (i) is not a broker or dealer
in securities, and (ii) places more than
390 orders in listed options per day on
average during a calendar month for its
own beneficial account(s). A
Participant 4 or a Public Customer 5 may,
without limitation, be a Professional.
Moreover, in order to properly represent
orders entered on the Exchange
according to the new definition, a
Participant will be required to
appropriately mark all Professional
orders.6 To comply with this
requirement, Participants will be
required to review their Public
Customers’ activity on at least a
quarterly basis to determine whether
orders that are not for the account of a
broker-dealer should be represented as
Professional orders.7 The Exchange will
issue a notice to Participants via OTA or
ORA outlining the procedures for the
implementation of the proposal.
The professional order designation
rule will apply to NOM members,
erowe on DSK5CLS3C1PROD with NOTICES
3 See
Securities Exchange Act Release No. 62724
(August 16, 2010), 75 FR 51509 (‘‘Notice’’).
4 A member of NOM is known as a Participant.
Some participants are also members of other
options exchanges such as, for example,
International Securities Exchange, LLC (‘‘ISE’’),
Chicago Board Options Exchange, Incorporated
(‘‘CBOE’’), and NASDAQ OMX PHLX LLC (‘‘Phlx’’).
See Notice, supra note 3. See also Chapter I, Section
1(a)(40) of the NOM Rules.
5 Public Customer is defined in Chapter I, Section
1(a)(48) as a person that is not a broker or dealer
in securities.
6 The Exchange intends to require Participants to
identify Professional orders submitted
electronically by identifying them in the customer
type field, and will notify Participants via an
Options Trader Alert (‘‘OTA’’) or Options Regulatory
Alert (‘‘ORA’’) regarding this requirement.
7 According to NASDAQ, Participants will be
required to conduct a quarterly review and make
any appropriate changes to the way in which they
are representing orders within five business days
after the end of each calendar quarter. While
Participants will only be required to review their
accounts on a quarterly basis, if during a quarter
NOM identifies a customer for which orders are
being represented as other than Professional orders
but that has averaged more than 390 orders per day
during a month, NOM will notify the Participant
and the Participant will be required to change the
manner in which it is representing the customer’s
orders within five business days. This is similar to
the process of other options exchanges that have
adopted a Professional designation. See, e.g.,
Securities Exchange Act Release No. 61802 (March
30, 2010), 75 FR 17193 (April 5, 2010) (SR–Phlx–
2010–05).
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15:29 Oct 07, 2010
Jkt 223001
including NASDAQ Options Services
LLC (‘‘NOS’’). NOS is NOM’s exclusive
order router for all orders that come
through the Exchange.8 Under the
proposal, NOS, a member of several
exchanges that have rules requiring a
Professional designation, will be able to
route Professional orders to those
options exchanges that require
Professional orders to be designated as
such.9
The Professional definition will not
revise the Exchange’s price/time order
entry (priority) rules. For example,
unlike other options exchanges with the
Professional designation, the proposed
rule change does not affect on NOM the
priority of orders designated as
Professional. Instead, the proposal is
intended to make certain that
Participants mark Professional orders
properly regardless of whether the order
is entered on NOM or routed to another
options exchange that has the
Professional designation. Moreover,
when the proposed Professional
designation is in place, NOM will be
able to accept orders that are marked as
Professional.10
The designation of an order as
Professional will not result in any
different treatment of such orders for
purposes of NOM rules concerning
away market protection. That is, all nonbroker-dealer orders, including those
orders that meet the definition of
Professional, will continue to be treated
equally for purposes of NOM’s away
market protection rules.11
III. Discussion and Commission’s
Findings
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.12 In particular, the
Commission finds that the proposed
rule change is consistent with Section
8 See
Notice, supra note 3.
Professional definition proposed by NOM
comports with the Professional designation that has
been implemented by Phlx, CBOE, ISE, and NYSE
Amex LLC (‘‘NYSE Amex’’). See Securities
Exchange Act Release Nos. 61802 (March 30, 2010),
75 FR 17193 (April 5, 2010) (SR–Phlx–2010–05);
61198 (December 17, 2009), 74 FR 68880 (December
29, 2009) (SR–CBOE–2009–078); 59287 (January 23,
2009), 74 FR 5694 (January 30, 2009) (SR–ISE–
2006–26); and 61818 (March 31, 2010), 75 FR 17457
(April 6, 2010) (SR–NYSEAmex–2010–18).
10 According to NASDAQ, NOM only accepts
orders that are marked as customer, firm, market
maker, or away market maker orders.
11 See, e.g., Chapter VI, Section 11 and Chapter
XII.
12 In approving this proposal, the Commission has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
9 The
PO 00000
Frm 00082
Fmt 4703
Sfmt 4703
6(b)(5) of the Act, which requires,
among other things, that the rules of a
national securities exchange be
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, and not be designed to
permit unfair discrimination between
customers, issuers, brokers, or dealers.
The Commission notes that NOM’s
proposed definition of Professional and
requirement that Professional orders be
properly marked are consistent with the
rules of other exchanges relating to
Professional orders, which previously
were approved by the Commission.13
The Commission notes that the proposal
will not amend NOM’s price/time order
entry (priority) rules with respect to the
treatment of orders submitted to NOM.
The proposal in effect allows NOM to
accept orders marked as Professional
and, if necessary to comply with its
order protection rules, to route them via
NOS to an away market that maintains
the Professional order designation, in
accordance with that exchange’s order
marking requirements. The Commission
believes that conforming NOM’s rules to
those of the other exchanges that have
the Professional order designation will
reduce disparate rules in this area and
may help reduce regulatory arbitrage.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,14 that the
proposed rule change (SR–NASDAQ–
2010–099) be, and hereby is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–25420 Filed 10–7–10; 8:45 am]
BILLING CODE 8011–01–P
DEPARTMENT OF STATE
[Public Notice 7200]
60-Day Notice of Proposed Information
Collection: Form DS–3057, Medical
Clearance Update, OMB 1405–0131
Notice of request for public
comments.
ACTION:
The Department of State is
seeking Office of Management and
Budget (OMB) approval for the
SUMMARY:
13 See
supra note 9.
U.S.C. 78s(b)(2).
15 17 CFR 200.30–3(a)(12).
14 15
E:\FR\FM\08OCN1.SGM
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]]>Agencies
[Federal Register Volume 75, Number 195 (Friday, October 8, 2010)]
[Notices]
[Pages 62443-62444]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-25420]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63028; File No. SR-NASDAQ-2010-099]
Self-Regulatory Organizations; NASDAQ Stock Market LLC; Order
Approving a Proposed Rule Change To Adopt a Definition of Professional
and Require That All Professional Orders Be Appropriately Marked
October 1, 2010.
I. Introduction
On August 6, 2010, The NASDAQ Stock Market (``NASDAQ''), 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 Chapter
I, Section 1 (Definitions) of the rules of the Nasdaq Options Market
(``NOM'') to adopt a definition of ``Professional'' and require that
all Professional orders be appropriately marked by NOM
[[Page 62444]]
Participants (``NOM Rules''). The proposed rule change was published
for comment in the Federal Register on August 20, 2010.\3\ The
Commission received no comment letters 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. 62724 (August 16,
2010), 75 FR 51509 (``Notice'').
---------------------------------------------------------------------------
II. Description
Under the proposal, new Chapter I, Section 1(a)(48) will state that
the term ``Professional'' means any person or entity that (i) is not a
broker or dealer in securities, and (ii) places more than 390 orders in
listed options per day on average during a calendar month for its own
beneficial account(s). A Participant \4\ or a Public Customer \5\ may,
without limitation, be a Professional. Moreover, in order to properly
represent orders entered on the Exchange according to the new
definition, a Participant will be required to appropriately mark all
Professional orders.\6\ To comply with this requirement, Participants
will be required to review their Public Customers' activity on at least
a quarterly basis to determine whether orders that are not for the
account of a broker-dealer should be represented as Professional
orders.\7\ The Exchange will issue a notice to Participants via OTA or
ORA outlining the procedures for the implementation of the proposal.
---------------------------------------------------------------------------
\4\ A member of NOM is known as a Participant. Some participants
are also members of other options exchanges such as, for example,
International Securities Exchange, LLC (``ISE''), Chicago Board
Options Exchange, Incorporated (``CBOE''), and NASDAQ OMX PHLX LLC
(``Phlx''). See Notice, supra note 3. See also Chapter I, Section
1(a)(40) of the NOM Rules.
\5\ Public Customer is defined in Chapter I, Section 1(a)(48) as
a person that is not a broker or dealer in securities.
\6\ The Exchange intends to require Participants to identify
Professional orders submitted electronically by identifying them in
the customer type field, and will notify Participants via an Options
Trader Alert (``OTA'') or Options Regulatory Alert (``ORA'')
regarding this requirement.
\7\ According to NASDAQ, Participants will be required to
conduct a quarterly review and make any appropriate changes to the
way in which they are representing orders within five business days
after the end of each calendar quarter. While Participants will only
be required to review their accounts on a quarterly basis, if during
a quarter NOM identifies a customer for which orders are being
represented as other than Professional orders but that has averaged
more than 390 orders per day during a month, NOM will notify the
Participant and the Participant will be required to change the
manner in which it is representing the customer's orders within five
business days. This is similar to the process of other options
exchanges that have adopted a Professional designation. See, e.g.,
Securities Exchange Act Release No. 61802 (March 30, 2010), 75 FR
17193 (April 5, 2010) (SR-Phlx-2010-05).
---------------------------------------------------------------------------
The professional order designation rule will apply to NOM members,
including NASDAQ Options Services LLC (``NOS''). NOS is NOM's exclusive
order router for all orders that come through the Exchange.\8\ Under
the proposal, NOS, a member of several exchanges that have rules
requiring a Professional designation, will be able to route
Professional orders to those options exchanges that require
Professional orders to be designated as such.\9\
---------------------------------------------------------------------------
\8\ See Notice, supra note 3.
\9\ The Professional definition proposed by NOM comports with
the Professional designation that has been implemented by Phlx,
CBOE, ISE, and NYSE Amex LLC (``NYSE Amex''). See Securities
Exchange Act Release Nos. 61802 (March 30, 2010), 75 FR 17193 (April
5, 2010) (SR-Phlx-2010-05); 61198 (December 17, 2009), 74 FR 68880
(December 29, 2009) (SR-CBOE-2009-078); 59287 (January 23, 2009), 74
FR 5694 (January 30, 2009) (SR-ISE-2006-26); and 61818 (March 31,
2010), 75 FR 17457 (April 6, 2010) (SR-NYSEAmex-2010-18).
---------------------------------------------------------------------------
The Professional definition will not revise the Exchange's price/
time order entry (priority) rules. For example, unlike other options
exchanges with the Professional designation, the proposed rule change
does not affect on NOM the priority of orders designated as
Professional. Instead, the proposal is intended to make certain that
Participants mark Professional orders properly regardless of whether
the order is entered on NOM or routed to another options exchange that
has the Professional designation. Moreover, when the proposed
Professional designation is in place, NOM will be able to accept orders
that are marked as Professional.\10\
---------------------------------------------------------------------------
\10\ According to NASDAQ, NOM only accepts orders that are
marked as customer, firm, market maker, or away market maker orders.
---------------------------------------------------------------------------
The designation of an order as Professional will not result in any
different treatment of such orders for purposes of NOM rules concerning
away market protection. That is, all non-broker-dealer orders,
including those orders that meet the definition of Professional, will
continue to be treated equally for purposes of NOM's away market
protection rules.\11\
---------------------------------------------------------------------------
\11\ See, e.g., Chapter VI, Section 11 and Chapter XII.
---------------------------------------------------------------------------
III. Discussion and Commission's Findings
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.\12\ In particular, the Commission finds that the proposed
rule change is consistent with Section 6(b)(5) of the Act, which
requires, among other things, that the rules of a national securities
exchange be 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, and not be designed to permit unfair
discrimination between customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------
\12\ In approving this proposal, the Commission has considered
the proposed rule's impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
---------------------------------------------------------------------------
The Commission notes that NOM's proposed definition of Professional
and requirement that Professional orders be properly marked are
consistent with the rules of other exchanges relating to Professional
orders, which previously were approved by the Commission.\13\ The
Commission notes that the proposal will not amend NOM's price/time
order entry (priority) rules with respect to the treatment of orders
submitted to NOM. The proposal in effect allows NOM to accept orders
marked as Professional and, if necessary to comply with its order
protection rules, to route them via NOS to an away market that
maintains the Professional order designation, in accordance with that
exchange's order marking requirements. The Commission believes that
conforming NOM's rules to those of the other exchanges that have the
Professional order designation will reduce disparate rules in this area
and may help reduce regulatory arbitrage.
---------------------------------------------------------------------------
\13\ See supra note 9.
---------------------------------------------------------------------------
IV. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\14\ that the proposed rule change (SR-NASDAQ-2010-099) be, and
hereby is, approved.
---------------------------------------------------------------------------
\14\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
---------------------------------------------------------------------------
\15\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-25420 Filed 10-7-10; 8:45 am]
BILLING CODE 8011-01-P
