Federal Register / Vol. 76, No. 32 / Wednesday, February 16, 2011 / Notices 9067 

15 15 U.S.C. 78f(b)(5). 16 15 U.S.C. 78s(b)(2). 17 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3A Complex Order is any order involving the 

simultaneous purchase and/or sale of two or more 

different options series in the same underlying 

security, priced at a net debit or credit based on the 

relative prices of the individual components, for the 

same account, for the purpose of executing a 

particular investment strategy. Furthermore, a 

Complex Order can also be a stock-option order, 

which is an order to buy or sell a stated number 

of units of an underlying stock or ETF coupled with 

the purchase or sale of options contract(s). See 

Exchange Rule 1080, Commentary .08(a)(i). 

4See Securities Exchange Act Release No. 63777 

(January 26, 2011), 76 FR 2733 (January 14, 2011) 

(SR–Phlx-2010–157). 

the Fund will comply with all other 

requirements of NYSE Arca Equities 

Rule 5.2(j)(3), applicable to Units 

including, but not limited to, 

requirements relating to the 

dissemination of key information such 

as the Index value and Intraday 

Indicative Value, rules governing the 

trading of equity securities, trading 

hours, trading halts, surveillance, 

firewalls, and Information Bulletins to 

ETP Holders, as set forth in prior 

Commission orders approving the 

generic listing rules applicable to the 

listing and trading of Units. 

For the foregoing reasons, the 

Commission finds that the proposed 

rule change is consistent with Section 

6(b)(5) of the Act 15 and the rules and 

regulations thereunder applicable to a 

national securities exchange. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,16 that the 

proposed rule change (SR–NYSEArca– 

2010–120), be, and it hereby is, 

approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–3441 Filed 2–15–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63880; File No. SR–Phlx– 

2011–12] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by NASDAQ 

OMX PHLX LLC Relating to Fees for 

Complex Orders 

February 9, 2011. 

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 February 

7, 2011, NASDAQ OMX PHLX LLC 

(‘‘Phlx’’ or ‘‘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 its 

Complex Order 3 Fees in Section I of its 

Fee Schedule titled Rebates and Fees for 

Adding and Removing Liquidity in 

Select Symbols. 

This filing is effective on February 7, 

2011. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://nasdaqtrader.com/ 

micro.aspx?id=PHLXfilings, at the 

principal office of the Exchange, at the 

Commission’s Public Reference Room, 

and on the Commission’s Web site at 

http://www.sec.gov. 

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 

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 

The purpose of the proposed rule 

change is to modify the Exchange’s Fee 

Schedule to support the enhanced 

Complex Order System.4

Changes to the Fees in Part B, 

Complex Orders. Specifically, the 

Exchange is proposing to amend the 

Rebates for Adding Liquidity, create 

Fees for Adding Liquidity and amend 

Fees for Removing Liquidity. With 

respect to the Rebate for Adding 

Liquidity, the Exchange proposes to 

increase the Customer rebate to $0.24 

and not pay other market participants a 

rebate. With respect to the Fees for 

Adding Liquidity, the Exchange 

proposes to not assess Customers any 

fees and assess market makers $0.10 per 

contract and Firms, Broker-Dealers and 

Professionals $0.20 per contract. With 

respect to the Fees for Removing 

Liquidity, the Exchange proposes to 

increase Firms and Professionals to 

$0.28 per contract (a $0.01 increase). 

A table displaying the proposed fees 

follows as well as a description of each 

proposed amendment. 

Customer Directed 

participant 

Specialist, 

ROT, SQT 

and RSQT 

Firm Broker-dealer Professional 

Rebate for Adding Liquidity ..................... $0.24 $0.00 $0.00 $0.00 $0.00 $0.00 

Fee for Adding Liquidity ........................... 0.00 0.10 0.10 0.20 0.20 0.20 

Fee for Removing Liquidity ...................... 0.25 0.25 0.27 0.28 0.35 0.28 

mstockstill on DSKH9S0YB1PROD with NOTICES

9068 Federal Register / Vol. 76, No. 32 / Wednesday, February 16, 2011 / Notices 

5The term ‘‘Directed Participant’’ applies to 

transactions for the account of a Specialist, 

Streaming Quote Trader or Remote Streaming Quote 

Trader resulting from a Customer order that is 

(1) directed to it by an order flow provider, and 

(2) executed by it electronically on Phlx XL II. 

6A Specialist is an Exchange member who is 

registered as an options specialist pursuant to Rule 

1020(a). 

7A Registered Options Trader (‘‘ROT’’) includes a 

Streaming Quote Trader (‘‘SQT’’), a RSQT and a 

Non-SQT ROT, which by definition is neither a 

SQT or a RSQT. A ROT is defined in Exchange Rule 

1014(b) as a regular member or a foreign currency 

options participant of the Exchange located on the 

trading floor who has received permission from the 

Exchange to trade in options for his own account. 

See Exchange Rule 1014 (b)(i) and (ii). 

8An SQT is defined in Exchange Rule 

1014(b)(ii)(A) as an ROT who has received 

permission from the Exchange to generate and 

submit option quotations electronically in options 

to which such SQT is assigned. 

9A Remote Streaming Quote Trader (‘‘RSQT’’) is 

defined in Exchange Rule 1014(b)(ii)(B) as an ROT 

that is a member or member organization with no 

physical trading floor presence who has received 

permission from the Exchange to generate and 

submit option quotations electronically in options 

to which such RSQT has been assigned. An RSQT 

may only submit such quotations electronically 

from off the floor of the Exchange. 

10The 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). See Rule 

1000(b)(14). 

11The Exchange market maker category includes 

Specialists (see Rule 1020) and ROTs (Rule 

1014(b)(i) and (ii)), which includes SQTs (see Rule 

1014(b)(ii)(A)) and RSQTs (see Rule 1014(b)(ii)(B)). 

12A Complex Order Strategy means any complex 

order involving any option series which is priced 

at a net debit or credit (based on the relative prices 

of each component). See Exchange Rule 1080, 

Commentary .08(a)(ii). 

13Electronic auctions include, without limitation, 

COLA and the Quote and Market Exhaust auctions. 

See Exchange Rule 1017. This does not include 

Exchange’s price improvement mechanism known 

as Price Improvement XL or (PIXLSM) as described 

in Exchange Rule 1080(n). 

14See Part C of the Exchange’s Fee Schedule. 

15See Part C of the Exchange’s Fee Schedule. 

16This includes orders transacted in an electronic 

auction and the Exchange’s opening process. 

17Part C applies to the fees in Parts A, single 

contra-side order, and B, complex orders. 

18 In a Complex Order auction, the Customer 

would receive the proposed $0.24 per contract 

Rebate for Adding Liquidity. 

First, the Exchange is proposing to 

amend the Rebates for Adding Liquidity 

applicable to Section I, Part B, Complex 

Orders. The Exchange currently pays 

the following Rebates for Adding 

Liquidity for Complex Orders: $0.22 per 

contract for Customers; $0.25 per 

contract for Directed Participants; 5

$0.23 per contract for Specialists,6

Registered Options Traders,7 SQT,8 and 

Remote Streaming Quote Traders; 9

$0.10 per contract for Firms and BrokerDealers; and $0.20 per contract for 

Professionals.10 The Exchange is 

proposing to increase the Rebate for 

Adding Liquidity for Customers to $0.24 

per contract and not pay a Rebate for 

Adding Liquidity to Directed 

Participants, Specialists, ROTs, SQTs, 

RSQTs, Firms, Broker-Dealers and 

Professionals, thereby reducing such 

rebate to $0.00. The Exchange believes 

that it is necessary to continue to pay a 

rebate solely for Customer complex 

orders that add liquidity in order to 

continue to attract Customer complex 

order flow to the Exchange. 

Second, the Exchange is proposing to 

assess new Fees for Adding Liquidity to 

Section I, Part B, Complex Orders. 

Specifically, the Exchange proposes to 

amend the fees in Part B to assess a Fee 

for Adding Liquidity for complex orders 

to all market participants, except for 

Customers. Customers would not pay a 

Fee for Adding Liquidity in complex 

orders. Directed Participants, 

Specialists, ROTs, SQTs, and RSQTs 

would be assessed a Fee for Adding 

Liquidity of $0.10 per contract. Firms, 

Broker-Dealers, and Professionals would 

be assessed a Fee for Adding Liquidity 

of $0.20 per contract. The Exchange 

believes that the increased Customer 

volume, from the proposed favorable 

Customer pricing, should benefit market 

makers 11 and other market participants 

engaged in proprietary trading. 

Third, the Exchange proposes to 

amend the Fees for Removing Liquidity 

in Section I, Part B, Complex Orders. 

The Exchange currently assesses the 

following Fees for Removing Liquidity: 

$0.25 per contract for Customers and 

Directed Participants; $0.27 per contract 

for Specialists, ROTs, SQTs, RSQTs, 

Firms, and Professionals; and $0.35 per 

contract for Broker-Dealers. The 

Exchange is now proposing to amend 

the Fees for Removing Liquidity to 

assess Firms and Professionals a fee of 

$0.28 per contract. All other Fees for 

Removing Liquidity would remain the 

same. 

Changes to the Applicability of Fees 

in Part B, Complex Orders. Fourth, the 

Exchange proposes to amend the 

applicability of the fees in Section I, 

Part B, Complex Orders by removing 

limitations relating to the contra-side of 

a transaction. The individual 

components of such a Complex Order 

would continue to be assessed the fees 

in Part B. 

The Exchange currently only pays a 

Rebate for Adding Liquidity to 

Customer complex orders when those 

orders are electronically executed 

against a non-Customer contra-side 

order with the same Complex Order 

Strategy.12 The Exchange is proposing 

to delete this text from the Fee 

Schedule. The Exchange proposes to 

pay this rebate regardless of the contraparty, except for orders executed as part 

of the Complex Order Live Auction 

(‘‘COLA’’), the Exchange’s opening 

process, and other electronic auctions 13

when such Customer order is contra to 

another Customer order.14 Accordingly, 

the rebate would be available to more 

complex orders executions, although as 

described above rebates would only be 

available to Customers. 

The Exchange currently does not 

assess a Fee for Removing Liquidity on 

Customer complex orders that are 

electronically executed against a 

Customer contra-side order with the 

same Complex Order Strategy. The 

Exchange is proposing to delete this text 

from the Fee Schedule. The Exchange 

would now assess a Fee for Removing 

Liquidity to all Customers regardless of 

the contra-party, except in an electronic 

auction and during the Exchange’s 

opening process.15 Accordingly, this fee 

would become applicable to more 

complex orders executions. 

The Exchange currently assesses Fees 

for Removing Liquidity to Directed 

Participants, Specialists, ROTs, SQTs, 

RSQTs, Firms, Broker-Dealers, and 

Professionals when those orders are 

electronically executed against a contraside order with the same Complex Order 

Strategy. The Exchange is proposing to 

delete this text from the Fee Schedule. 

Directed Participants, Specialists, ROTs, 

SQTs, RSQTs, Firms, Broker-Dealers, 

and Professionals would be assessed a 

fee under Section I, Part B.16

Changes to Part C of Section I. Fifth, 

the Exchange is proposing to amend 

Section I, Part C of the Fee Schedule 17

regarding electronic auctions and 

opening process. Currently, a Customer 

receives a Rebate for Adding Liquidity 

(as set forth in Part B) in an electronic 

auction and during the Exchange’s 

opening process, except when such 

Customer order is contra to another 

Customer order. This would remain the 

same for Customer complex orders that 

are executed as part of an electronic 

auction 18 and during the Exchange’s 

opening process. The Exchange is 

proposing to add language to Part C to 

provide that for Customer orders that 

are not complex orders, the Rebate for 

Adding Liquidity would instead remain 

at the current rate of $0.22 per contract, 

except when such Customer order is 

contra to another Customer order. 

The Exchange is not amending the 

applicability of the fees in Section I, 

Part A, Single Contra-Side Order. Single 

contra-side orders that are executed 

against the individual components of 

complex orders will continue to be 

assessed the fees in Part A. 

mstockstill on DSKH9S0YB1PROD with NOTICES

Federal Register / Vol. 76, No. 32 / Wednesday, February 16, 2011 / Notices 9069 

19 15 U.S.C. 78f(b). 

20 15 U.S.C. 78f(b)(4). 

21See Exchange Rule 1014 titled ‘‘Obligations and 

Restrictions Applicable to Specialists and 

Registered Options Traders.’’ 

22See Securities Exchange Act Release No. 62048 

(May 6, 2010) 75 FR 26830 (May 12, 2010) (SR–ISE– 

2010–43) (a rule change to incentivize market 

makers with rebates in order to promote and 

encourage liquidity in options classes that were 

subject to the fees proposed). 

23See The International Securities Exchange, 

LLC’s (‘‘ISE’’) Schedule of Fees, specifically ISE’s 

Select Symbols and the rates assessed on market 

makers, broker-dealers, firms and professionals. 

24See ISE’s Schedule of Fees, specifically ISE’s 

Select Symbols and the rates assessed on market 

makers, broker-dealers, firms and professionals. 

25See NOM Rule 7050. 

26See ISE’s Schedule of Fees. 

The Exchange also proposes to make 

minor, non-substantive, technical 

amendments to Section I of the Fee 

Schedule to amend the titles of the 

sections in Parts A and B. 

2. Statutory Basis 

The Exchange believes that its 

proposal to amend its Fee Schedule is 

consistent with Section 6(b) of the Act 19

in general, and furthers the objectives of 

Section 6(b)(4) of the Act 20 in 

particular, in that it is an equitable 

allocation of reasonable fees and other 

charges among Exchange members. The 

Exchange also believes that there is an 

equitable allocation of reasonable 

rebates among Exchange members. 

The Exchange operates in a highly 

competitive market comprised of nine 

U.S. options exchanges in which 

sophisticated and knowledgeable 

market participants can readily send 

order flow to competing exchanges if 

they deem fee levels at a particular 

exchange to be excessive. The Exchange 

believes that the Complex Order Fees it 

assesses must be competitive with fees 

charged by other exchanges. The 

Exchange further believes that this 

competitive marketplace impacts the 

fees assessed by the Exchange today and 

influences the proposals set forth below. 

The Exchange believes that the 

proposed fees and rebates are reasonable 

and equitably allocated to those 

members that opt to direct complex 

orders to the Exchange rather than 

competing venues. 

The Exchange believes that it is 

reasonable to only pay a Rebate for 

Adding Liquidity to Customers and pay 

no rebate to all other market 

participants because this Customer 

rebate would attract Customer order 

flow to the Exchange for the benefit of 

all market participants. The Exchange 

believes that the proposal is equitable 

because by paying a Rebate for Adding 

Liquidity only to Customers, all market 

participants would benefit from the 

increased liquidity which increased 

Customer order flow would bring to the 

Exchange. In addition, the Exchange 

believes that by not assessing such a Fee 

for Adding Liquidity on Customers and 

providing Customers a $0.24 per 

contract Rebate for Adding Liquidity 

further incentivizes Customer order 

flow to the Exchange for the benefit of 

all market participants. 

The Exchange believes that creating a 

Fee for Adding Liquidity of $0.10 for 

market makers and $0.20 for all other 

market participants, except for 

Customers, is reasonable because the 

Exchange believes that the price 

differentiation between Firms and 

Brokers-Dealers and Specialists, ROTs, 

SQTs and RSQTs is justified in that the 

Specialists, ROTs, SQTs and RSQTs 

have obligations to the market, which 

do not apply to Firms and BrokerDealers.21 Therefore, assessing market 

makers a lower fee to add liquidity as 

opposed to Firms, Broker-Dealers and 

Professionals is reasonable because of 

these obligations which only apply to 

market makers. Similarly, the Exchange 

believes that it is reasonable to assess a 

$0.28 per contract Fee for Removing 

Liquidity on Firms, and by extension 

Professionals, who have no such 

quoting requirements as do market 

makers because market makers have 

quoting obligations that do not apply to 

Firms and Professionals. The concept of 

incentivizing market makers, who have 

quoting obligations, by assessing a lower 

fee as compared with other market 

participants is not novel.22

Moreover, the Exchange believes that 

the proposed Fees for Adding Liquidity 

and Removing Liquidity are equitable 

because the fees are consistent with 

price differentiation that exists today at 

all option exchanges. Specifically, the 

Exchange believes that the proposed fee 

amendments to Part B for complex 

orders are equitable, because, other than 

Customers, all market participants 

would be assessed Fees for Adding 

Liquidity that are similar to fees 

assessed by other exchanges for 

complex order executions.23 In 

addition, the Fees for Removing 

Liquidity rates are similar to those 

assessed by ISE.24

In addition, the Exchange also 

believes that these fees are equitable 

because the net differential between the 

proposed fees, for either adding or 

removing liquidity, is similar to the 

differential which exists on the 

NASDAQ Options Market (‘‘NOM’’) 

between Customers and Firms for 

adding liquidity. NOM currently has a 

differential of $0.65 per contract 

between the Firm Fee for Adding 

Liquidity of $0.45 per contract as 

compared to the Customer Rebate to 

Add Liquidity of $0.20 per contract in 

the section titled ‘‘All Other Options’’.25

As stated above, the Exchange 

proposes to amend the applicability of 

the fees in Section I, Part B, Complex 

Orders by removing limitations relating 

to the contra-side of a transaction. The 

Exchange believes that this proposal 

related to the applicability of fees is 

reasonable, because it seeks to pay 

rebates and assess fees regardless of the 

contra-party. Additionally, the 

Exchange believes these amendments 

are equitable, because the proposal is 

consistent with the fees and rebates 

assessed pursuant to Section I, Part A of 

the current Fee Schedule and general 

industry fee assessments of members 

that allow for different rates to be 

charged for different order types 

originated by dissimilarly classified 

market participants. Further, the fee 

differentials between market 

participants are within existing industry 

standards.26

Finally, as stated above, the Exchange 

is proposing to pay Customer orders that 

are not complex orders, a Rebate for 

Adding Liquidity of $0.22 per contract, 

except when such Customer order is 

contra to another Customer order. The 

Exchange believes that its proposal to 

pay different rebates as between 

complex and non-complex orders 

transacted during certain auctions and 

the Exchange’s opening process is 

reasonable because the Exchange is 

continuing to pay rebates to Customers 

depending on the transaction type as a 

means to compete for Customer order 

flow. The Exchange believes that the 

proposal is equitable because by paying 

a Rebate for Adding Liquidity only to 

Customers, the Exchange believes that 

all market participants would benefit 

from the increased liquidity which 

increased Customer order flow would 

bring to the Exchange. 

The impact of the proposal upon the 

net fees paid by a particular market 

participant will depend on a number of 

variables, including its monthly 

volumes, the order types it uses, and the 

prices of its quotes and orders (i.e., its 

propensity to add or remove liquidity). 

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. 

mstockstill on DSKH9S0YB1PROD with NOTICES

9070 Federal Register / Vol. 76, No. 32 / Wednesday, February 16, 2011 / Notices 

27 15 U.S.C. 78s(b)(3)(A)(ii). 

28 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 15 U.S.C. 78s(b)(3)(A)(iii). 

3 17 CFR 240.19b–4(f)(4). 

4A corporate action is an event that produces a 

corporate restructuring. Some of the most common 

corporate actions include dividend payments, 

interest payments, voluntary tender offers, and 

redemption of municipal and corporate bonds. 

5The Participants participating in the pilot will 

continue to receive corporate action information by 

CCF files in order to run their production processes. 

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 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) of the Act.27 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. If the Commission 

takes such action, the Commission shall 

institute proceedings to determine 

whether the proposed rule should be 

approved or disapproved. 

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 (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number SR–Phlx–2011–12 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–2011–12. 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 (http://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 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– 

2011–12 and should be submitted on or 

before March 9, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.28

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–3422 Filed 2–15–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63886; File No. SR–DTC– 

2011–02] 

Self-Regulatory Organizations; The 

Depository Trust Company; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to a 

New Standard To Communicate 

Corporate Action Events to 

Participants 

February 10, 2011. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’),1 notice is hereby given that on 

January 28, 2011, The Depository Trust 

Company (‘‘DTC’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

primarily by DTC. DTC filed the 

proposed rule change pursuant to 

Section 19(b)(3)(A)(iii) of the Act 2 and 

Rule 19b–4(f)(4) thereunder 3 so that the 

proposal was effective upon filing with 

the Commission. 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 

Under the proposed rule change, a 

group of DTC Participants has 

volunteered to participate in a pilot test 

whereby on or about April 25, 2011, 

DTC will publish corporate actions 

pursuant to the International Standard 

Organization (‘‘ISO’’) 20022 format. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

DTC 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. DTC has prepared 

summaries, set forth in sections A, B, 

and C below, of 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 

DTC handles essential aspects of 

corporate action 4 processing by 

routinely receiving and distributing 

information to its Participants using its 

proprietary computer to computer 

facility (‘‘CCF’’) files. In order to reduce 

risk and to improve transparency in the 

announcement and processing of 

corporate actions, DTC is updating its 

standards for announcing these events 

by publishing corporate action data 

pursuant to the International Standards 

Organization (‘‘ISO’’) 20022 format for 

the entire lifecycle of the event. 

A group of DTC Participants has 

volunteered to participate in a pilot test 

on or about April 25, 2011, whereby 

corporate actions will be published in 

the ISO 20022 format. The pilot data 

will be created in a test environment 

with the data systemically generated 

from the prior day’s production and will 

include event types, payout types, and 

other key corporate action information. 

Participants have been advised that they 

should not rely on the data from this 

pilot to run their production processes.5

mstockstill on DSKH9S0YB1PROD with NOTICES