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
Federal Register / Vol. 76, No. 43 / Friday, March 4, 2011 / Notices 12207 

7 17 CFR 242.200(g). 

8See Securities Exchange Act Release No. 61595 

(February 26, 2010), 75 FR 11232 (March 10, 2010). 

See also Division of Trading and Markets: 

Responses to Frequently Asked Questions 

Concerning Rule 201 of Regulation SHO. 

9 17 CFR 242.201. 

10The term ‘‘trading center’’ is defined in Rule 

201(a)(9) of Regulation SHO. 17 CFR 242.201(a)(9). 

Both the Exchange and NOS are ‘‘trading centers’’ 

within the definition of Rule 201(a)(9). 

11The term ‘‘covered security’’ is defined in Rule 

201(a)(1) as any NMS stock as defined in Rule 

600(b)(47) of Regulation NMS. 17 CFR 

242.201(a)(1). See also 17 CFR 242.600(b)(47). 

12The term ‘‘national best bid’’ is defined in Rule 

201(a)(4). 17 CFR 242.201(a)(4). 

13The term ‘‘listing market’’ is defined in Rule 

201(a)(3). 17 CFR 242.201(a)(3). 

14 17 CFR 242.201(b)(1)(i). 

15 17 CFR 242.201(b)(1)(ii). 

16 17 CFR 242.200(g)(2). 

17See Securities Exchange Act Release No. 63247 

(November 4, 2010), 75 FR 68702 (November 9, 

2010) (extending the compliance date of the 

amendments to Rules 201 and 200(g) of Regulation 

SHO from November 10, 2010 until February 28, 

2011). 

18The Exchange notes that a broker or dealer may 

mark a sell order ‘‘short exempt’’ only if the 

provisions of Rule 201(c) or (d) are met. See 17 CFR 

242.200(g)(2). Since NOS and the Exchange do not 

display the stock or ETF portion of a complex order, 

see infra note 20, a broker-dealer should not mark 

the short sale order ‘‘short exempt’’ under Rule 

201(c). See also Division of Trading and Markets: 

Responses to Frequently Asked Questions 

Concerning Rule 201 of Regulation SHO, Q&A Nos. 

4.2, 5.4 and 5.5. 

19 17 CFR 242.201(b)(1)(iii)(B). 

20The stock or ETF portion of a complex order 

is not displayed as an order, because the complex 

order as a whole is handled as a single order with 

multiple contingencies. 

21 15 U.S.C. 78f(b). 

22 15 U.S.C. 78f(b)(5). 

stock/ETF component, member 

organizations must mark, pursuant to 

Regulation SHO, whether that order 

involves a long or short sale.7 The Phlx 

trading System will accept complex 

orders with a stock/ETF component 

marked to reflect either a long or short 

position; specifically, orders not 

currently marked as ‘‘long’’ or ‘‘short’’ are 

rejected by the Phlx trading System. 

In 2010, the Commission amended 

Rule 201 and Rule 200(g) of Regulation 

SHO under the Act.8 The amendments 

to Rule 201 adopt a short sale-related 

circuit breaker that, if triggered, imposes 

a restriction on the prices at which 

covered securities may be sold short 

(‘‘short sale price test restriction’’).9

Specifically, Rule 201 requires a trading 

center 10 to establish, maintain, and 

enforce written policies and procedures 

reasonably designed to prevent the 

execution or display of a short sale 

order of a covered security 11 at a price 

that is less than or equal to the current 

national best bid 12 if the price of that 

covered security decreases by 10% or 

more from the covered security’s closing 

price as determined by the listing 

market 13 for the covered security as of 

the end of regular trading hours on the 

prior day; 14 and impose these 

requirements for the remainder of the 

day and the following day when a 

national best bid for the covered 

security is calculated and disseminated 

on a current and continuing basis by a 

plan processor pursuant to an effective 

national market system plan.15 The 

amendments to Rule 200(g) provide that 

a broker-dealer may mark certain 

qualifying short sale orders ‘‘short 

exempt.’’ 16 Thereafter, the Commission 

extended the compliance date for the 

amendments to Rule 201 and Rule 

200(g) until February 28, 2011.17 The 

Exchange is filing this proposed rule 

change to address the new amendments 

to Regulation SHO. 

Accordingly, the purpose of the 

proposed rule change is to explain the 

Exchange’s handling of stock/ETF sell 

components entered as part of a 

complex order in accordance with the 

amendments to Regulation SHO. In 

particular, the Exchange is proposing to 

provide that, if the stock/ETF leg of a 

complex order submitted to the Phlx 

trading System is a sell order, then the 

stock/ETF leg must be marked ‘‘long,’’ 

‘‘short,’’ or ‘‘short exempt’’ in compliance 

with Rule 200(g) of Regulation SHO; if 

it is not so marked, the order will be 

rejected. Thus, the Exchange will now 

accept complex orders marked ‘‘short 

exempt’’ and Rule 1080.08(b)(iv) is being 

adopted to reflect this.18 The Exchange 

and NOS, as trading centers, must 

comply with Rule 201(b)(1)(iii)(B), 

which provides that a trading center 

must establish, maintain, and enforce 

written policies and procedures 

reasonably designed to permit the 

execution or display of a short sale 

order of a covered security marked 

‘‘short exempt’’ without regard to 

whether the order is at a price that is 

less than or equal to the current national 

best bid.19

Furthermore, the Exchange proposes 

to amend Rule 1080.08(h) to describe 

the handling of short sales involving the 

stock/ETF leg of a complex order 

submitted to its Phlx trading System. 

When the short sale price test restriction 

is triggered for a covered security, NOS 

will not execute or display 20 a short 

sale order in the underlying covered 

security component of a complex order 

if the price is equal to or below the 

current national best bid. However, NOS 

will execute a short sale order in the 

underlying covered security component 

of a complex order if such order is 

marked ‘‘short exempt,’’ regardless of 

whether it is at a price that is equal to 

or below the current national best bid. 

If NOS cannot execute the underlying 

covered security component of a 

complex order in accordance with Rule 

201 of Regulation SHO, the Exchange 

will cancel back the complex order to 

the entering member organization. 

When a short sale price test restriction 

is triggered in a covered security, orders 

in that security marked ‘‘short’’ may be 

executed by NOS if the order is at a 

price above the current national best bid 

at the time of execution. Thus, the 

proposal is narrowly tailored to address 

Rule 201 by only cancelling orders 

marked ‘‘short’’ when a short sale price 

test restriction is triggered in the 

covered security and the sell order is at 

a price equal to or below the current 

national best bid at the time of 

execution. 

The Exchange believes that this 

approach is consistent with Rule 201. 

Under this proposal, the Exchange and 

NOS, as trading centers, will prevent the 

execution or display of a short sale of 

the stock/ETF component of a complex 

order priced at or below the current 

national best bid when the short sale 

price test restriction is triggered. 

Specifically, while the Exchange and 

NOS are determining, respectively, the 

prices of the options component and of 

the stock or ETF component of the 

complex order, as described above, NOS 

will check the current national best bid 

of the stock or ETF component at the 

time of execution. The execution of one 

component is contingent upon the 

execution of all other components and 

once a complex order is accepted and 

validated by the Phlx trading System, 

the entire package is processed as a 

single transaction and both the option 

leg and stock/ETF components are 

simultaneously processed. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act 21 in general, and furthers the 

objectives of Section 6(b)(5) of the Act 22

in particular, in that it is designed to 

promote just and equitable principles of 

trade, and, in general to protect 

investors and the public interest, by 

providing clarity on the short sale order 

handling procedures of the stock/ETF 

component of a complex order when a 

short sale price test restriction is in 

effect for a covered security. 

Furthermore, the Exchange believes that 

the proposed rule change is consistent 

with Regulation SHO in that it provides 

for the handling of short exempt orders 

as well as short sale orders when the 

short sale price test restriction is 

triggered. 


jlentini on DSKJ8SOYB1PROD with NOTICES
12208 Federal Register / Vol. 76, No. 43 / Friday, March 4, 2011 / Notices 

23 15 U.S.C. 78s(b)(3)(A). 

24 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. 

25 17 CFR 240.19b–4(f)(6)(iii). 

26See supra note 17. 

27For 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). 28 17 CFR 200.30–3(a)(12). 

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 after the date of 

the filing, or such shorter time as the 

Commission may designate, it has 

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

of the Act 23 and Rule 19b–4(f)(6) 24

thereunder. The Exchange has requested 

that the Commission waive the 30-day 

pre-operative waiting period contained 

in Exchange Act Rule 19b–4(f)(6)(iii) 25

so that the Exchange may implement the 

change no later than February 28, 2011 

to coincide with the compliance date for 

the amendments to Rules 200(g) and 201 

of Regulation SHO. The Commission 

believes that waiver of the operative 

delay is consistent with the protection 

of investors and the public interest 

because the proposed rule change, 

among other things, implements the 

amendments to Rules 200(g) and 201 of 

Regulation SHO which have a February 

28, 2011 compliance date.26 For this 

reason, the Commission designates the 

proposed rule change to be operative 

upon filing with the Commission.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–2011–27 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–2011–27. 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–2011–27 and should 

be submitted on or before March 25, 

2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.28

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–4885 Filed 3–3–11; 8:45 am] 

BILLING CODE 8011–01–P 

SOCIAL SECURITY ADMINISTRATION 

Agency Information Collection 

Activities: Comment Request 

The Social Security Administration 

(SSA) publishes a list of information 

collection packages requiring clearance 

by the Office of Management and 

Budget (OMB) in compliance with 

Public Law 104–13, the Paperwork 

Reduction Act of 1995, effective October 

1, 1995. This notice includes a revision 

and an extension to OMB-approved 

information collections. 

SSA is soliciting comments on the 

accuracy of the agency’s burden 

estimate; the need for the information; 

its practical utility; ways to enhance its 

quality, utility, and clarity; and ways to 

minimize burden on respondents, 

including the use of automated 

collection techniques or other forms of 

information technology. Mail, e-mail, or 

fax your comments and 

recommendations on the information 

collection(s) to the OMB Desk Officer 

and SSA Reports Clearance Officer at 

the following addresses or fax numbers. 

(OMB) 

Office of Management and Budget, 

Attn: Desk Officer for SSA, 

Fax: 202–395–6974, 

E-mail address: 

OIRA_Submission@omb.eop.gov 

(SSA) 

Social Security Administration, 

DCBFM, 

Attn: Reports Clearance Officer, 

1333 Annex Building, 

6401 Security Blvd., 

Baltimore, MD 21235, 

Fax: 410–965–6400, 

E-mail address: OPLM.RCO@ssa.gov 

SSA submitted the information 

collections listed below to OMB for 

clearance. Your comments on the 

information collections would be most 

useful if OMB and SSA receive them 

within 30 days from the date of this 

publication. To be sure we consider 

your comments, we must receive them 

no later than April 4, 2011. You can 

obtain a copy of the OMB clearance 


jlentini on DSKJ8SOYB1PROD with NOTICES