12204 Federal Register / Vol. 76, No. 43 / Friday, March 4, 2011 / Notices 

30 15 U.S.C. 78s(b)(3)(A)(iii). 

31 17 CFR 240.19b–4(f)(6). 

32 15 U.S.C. 78s(b)(3)(A)(iii). 

33 17 CFR 240.19b–4(f)(6)(iii). 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. 

34 17 CFR 240.19b–4(f)(6). 

35 17 CFR 240.19b–4(f)(6)(iii). 

36For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule change’s impact on efficiency, 

competition, and capital formation. 15 U.S.C. 78c(f). 

37 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

the close in violation of the Short Sale 

Price Test established in that rule. To 

that end, the proposed rule change will, 

among other things, amend the 

Exchange’s procedures for determining 

the closing price by treating short sale 

orders as orders subject to tick 

restrictions during a period when a 

Short Sale Price Test is in effect. 

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 that is 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 solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The Exchange has filed the proposed 

rule change pursuant to Section 

19(b)(3)(A)(iii) of the Act 30 and Rule 

19b–4(f)(6) thereunder.31 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 

prior to 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 32 and Rule 19b–4(f)(6)(iii) 

thereunder.33

A proposed rule change filed under 

Rule 19b–4(f)(6) 34 normally does not 

become operative prior to 30 days after 

the date of the filing. However, pursuant 

to Rule 19b–4(f)(6)(iii),35 the 

Commission may designate a shorter 

time if such action is consistent with the 

protection of investors and the public 

interest. The Exchange has asked the 

Commission to waive the 30-day 

operative delay so that the proposal may 

become operative immediately upon 

filing. The Commission hereby grants 

the request.36 Waiving the 30-day 

operative delay will allow the Exchange 

to implement the proposed amendments 

by February 28, 2011, which, as noted 

by the Exchange, is the compliance date 

for amendments to Regulation SHO 

under the Act. By waiving the operative 

delay, the Exchange will be able to 

comply with the amendments to 

Regulation SHO by February 28, 2011. 

Therefore, the Commission believes it is 

consistent with the protection of 

investors and the public interest to 

waive the 30-day operative delay and 

designates the proposal as operative 

upon filing. 

At any time within 60 days of the 

filing of such 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 (http://www.sec.gov/ 

rules/sro.shtml); or 

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

Number SR–NYSEAMEX–2011–09 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–NYSEAMEX–2011–09. 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 20549–1090. Copies of 

the filing will also be available for 

inspection and copying at the 

Exchange’s principal office and on its 

Internet Web site at http:// 

www.nyse.com. 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– 

NYSEAMEX–2011–09 and should be 

submitted on or before March 25, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.37

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–4890 Filed 3–3–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63970; File No. SR–BYX– 

2011–004] 

Self-Regulatory Organizations; BATS 

Y-Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change by BATS Exchange, Inc. 

To Adopt BYX Rule 11.21, entitled 

‘‘Input of Accurate Information’’ 

February 25, 2011. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on February 

18, 2011, BATS Y-Exchange, Inc. 

(‘‘Exchange’’ or ‘‘BYX’’) 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 

by the Exchange. The Exchange has 

designated this proposal as a ‘‘noncontroversial’’ proposed rule change 

pursuant to Section 19(b)(3)(A) of the 


jlentini on DSKJ8SOYB1PROD with NOTICES
Federal Register / Vol. 76, No. 43 / Friday, March 4, 2011 / Notices 12205 

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

4 17 CFR 240.19b–4(f)(6)(iii). 

5See Securities Exchange Act Release 59547 

(March 10, 2009), 74 FR 11386 (March 17, 2009). 

6 15 U.S.C. 78f(b). 

7 15 U.S.C. 78f(b)(5). 

8 15 U.S.C. 78s(b)(3)(A). 

9 17 CFR 240.19b–4(f)(6). 

10 In addition, Rule 19b–4(f)(6)(iii) requires the 

Exchange to give the Commission written notice of 

the Exchange’s 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 of the proposed rule 

change, or such shorter time as designated by the 

Commission. The Exchange has satisfied this 

requirement. 

11 15 U.S.C. 78s(b)(3)(C). 

Act 3 and Rule 19b–4(f)(6)(iii) 

thereunder,4 which renders it 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 

The Exchange proposes to adopt new 

BYX Rule 11.21 to require Members to 

identify each order accurately as a 

Principal, Agency, or Riskless Principal 

Order. 

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 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 Exchange proposes to add new 

BYX Rule 11.21 for the purpose of 

increasing transparency and to enhance 

the surveillance database and audit trail 

of transaction data used by the 

Exchange in surveillance of its market. 

The proposed rule change would 

require Members to identify the capacity 

of each order accurately as a Principal, 

Agency, or Riskless Principal Order. For 

purposes of surveillance, the Exchange 

currently identifies the capacity of each 

order as Principal, Agency, or Riskless 

Principal; however, several other 

capacities are accepted upon order 

entry, including no response, which are 

thereafter mapped to one of the abovelisted order capacities. By limiting the 

order capacity upon entry to Principal, 

Agency, or Riskless Principal and 

requiring Members to accurately submit 

an order capacity for each order, the 

Exchange will be able to more precisely 

identify the type of order received and 

more effectively surveil for abusive 

trading. 

BYX does not have a rule that makes 

an explicit statement regarding a 

Member’s obligation to input accurate 

information into the System. 

Notwithstanding, BYX believes that 

disciplinary cases against Members 

entering inaccurate or incomplete 

information may be brought 

appropriately under BYX Rule 3.1, 

which requires Members to observe high 

standards of commercial honor and just 

and equitable principles of trade. Rule 

3.1 protects the investing public and the 

securities industry from dishonest 

practices that are unfair to investors or 

hinder the functioning of a free and 

open market, even though those 

practices may not be illegal or violate a 

specific rule or regulation. Because of 

the regulatory importance of accurate 

information input in the System, BYX 

believes a rule that directly addresses 

Members’ obligation to provide accurate 

information is warranted. The proposed 

rule makes clear Members’ obligation to 

input accurate information into the 

System and that failure to do so would 

be considered a violation of BYX Rules. 

BYX notes that the Commission has 

previously approved rules proposed by 

the Nasdaq Stock Market LLC 

(‘‘Nasdaq’’) requiring participants to 

ensure that accurate information is 

entered into Nasdaq’s system, including 

but not limited to the capacity of the 

participant.5 Thus, the proposed rule 

change would bring BYX Rules in line 

with those of other self-regulatory 

organizations. 

In order to allow Members sufficient 

time to review and complete any 

systems changes necessitated by this 

filing, the Exchange has proposed an 

operative date of April 4, 2011. 

2. Statutory Basis 

The rule change proposed in this 

submission is consistent with the 

requirements of the Act and the rules 

and regulations thereunder that are 

applicable to a national securities 

exchange, and, in particular, with the 

requirements of Section 6(b) of the Act.6

Specifically, for the reasons described 

above, the proposed change is 

consistent with Section 6(b)(5) of the 

Act,7 because 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 regulating, clearing, settling, 

processing information with respect to, 

and facilitating transactions in 

securities, to remove impediments to 

and perfect the mechanism of a free and 

open market and a national market 

system, and to protect investors and the 

public interest. Specifically, the changes 

proposed herein will serve to promote 

the accuracy of information input into 

the Exchange. Accurate information is 

necessary for the efficient and fair 

operation of the Exchange, and will 

assist the Exchange in surveilling the 

markets for fraudulent activity. 

(B) Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change imposes any 

burden on competition. 

(C) Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

The Exchange has neither solicited 

nor received written comments on the 

proposed rule change. 

III. Date of Effectiveness of the 

Proposed Rule Changes and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act 8 and Rule 19b–4(f)(6) 9

thereunder because the proposal does 

not: (i) Significantly affect the 

protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) by its 

terms, 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.10

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.11

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. 


jlentini on DSKJ8SOYB1PROD with NOTICES
12206 Federal Register / Vol. 76, No. 43 / Friday, March 4, 2011 / Notices 

12 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 63777 

(January 26, 2011), 76 FR 5630 (February 1, 2011) 

(SR–Phlx–2010–157) (‘‘Complex Order rule filing’’). 

4A complex order is a an order involving the 

simultaneous purchase and/or sale of two or more 

different options series in the same underlying 

security or a stock-option order, priced as 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. See Rule 1080.08(a). 

5The NASDAQ OMX Group, Inc. owns both the 

Exchange and NOS; therefore, the Exchange and 

NOS are affiliates. 

6 17 CFR 242.200 et seq. 

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–BYX–2011–004 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–BYX–2011–004. 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 website 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 Number SR–BYX– 

2011–004 and should be submitted on 

or before March 25, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–4888 Filed 3–3–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63967; File No. SR–Phlx– 

2011–27] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by NASDAQ 

OMX PHLX LLC Relating to 

Amendments to Rules 200(g) and 201 

of Regulation SHO Applicable to 

Complex Orders 

February 25, 2011. 

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 February 

23, 2011, NASDAQ OMX PHLX LLC 

(‘‘Phlx’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘Commission’’) the proposed 

rule change as described in Items I and 

II below, which Items have been 

substantially 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 

Rule 1080.08 respecting complex orders 

to reflect the marking requirements of 

Regulation SHO and to address the 

handling of certain orders marked 

‘‘short’’ in compliance with Rule 201 of 

Regulation SHO, as explained further 

below. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://www.nasdaqtrader.com/ 

micro.aspx?id=PHLXRulefilings, 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 

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 

Recently, the Exchange received 

approval from the Commission to make 

various enhancements to its complex 

orders system, including to accept 

complex orders where one component is 

the underlying security of the options 

components.3 Specifically, the 

underlying stock or ETF can now be one 

component of a complex order.4 Nasdaq 

Options Services LLC (‘‘NOS’’), a 

registered broker-dealer and member of 

Financial Industry Regulatory 

Authority, is responsible for the 

execution of the stock or ETF 

component of a complex order as agent 

of the stock or ETF component.5 This is 

described in Rule 1080.08(h). A 

complex order with one component that 

is a stock or ETF is received by the 

Exchange with a net debit or credit 

price. The individual option leg(s) and 

stock/ETF component prices are not 

specified; rather, there is a single net 

debit or credit price on the order which 

is used by Phlx and NOS to determine 

the price of each component, including 

the stock/ETF. Specifically, although 

Phlx is calculating the price of the 

options components, a sophisticated 

algorithm is simultaneously causing 

NOS to calculate and execute the stock 

or ETF component of the Complex 

Order, which has been electronically 

communicated to NOS by the Exchange. 

Thus, because the execution of one 

component is contingent upon the 

execution of all others, the entire 

package is processed as a single 

transaction and both the option leg and 

stock/ETF components are 

simultaneously processed. 

In the Complex Order rule filing, the 

Exchange explained that with respect to 

short sale regulation, the proposed 

handling of the stock/ETF component of 

a complex order did not raise any issues 

of compliance with the currently 

operative provisions of Regulation 

SHO.6 When a complex order has a 


jlentini on DSKJ8SOYB1PROD with NOTICES