16462 Federal Register / Vol. 76, No. 56 / Wednesday, March 23, 2011 / Notices 

1See Securities Exchange Act Release No. 11673 

(September 23, 1975), 40 FR 45422 (October 2, 

1975). 

2See Securities Exchange Act Release No. 51808 

(June 9, 2005), 70 FR 37496 (June 29, 2005). 

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

2 17 CFR 240.19b–4. 

‘‘Registration of securities information 

processors: form of application and 

amendments’’. 

On September 23, 1975, the 

Commission adopted Rule 11Ab2–1 and 

Form SIP under the Securities Exchange 

Act of 1934 (‘‘Act’’) (15 U.S.C. 78a et 

seq.) to establish the procedures by 

which Securities Information Processor 

(‘‘SIP’’) files and amends their SIP 

registration statements.1 Under 

Regulation NMS Rule 11Ab2–1was 

redesignated as Rule 609.2 The 

information filed with the Commission 

pursuant to Rule 609 and Form SIP is 

designed to provide the Commission 

with the information necessary to make 

the required findings under the Act 

before granting the SIP’s application for 

registration. In addition, the 

requirement that a SIP file an 

amendment to correct any inaccurate 

information is designed to assure that 

the Commission has current, accurate 

information with respect to the SIP. 

This information is also made available 

to members of the public. 

Only exclusive SIPs are required to 

register with the Commission. An 

exclusive SIP is a SIP that engages on an 

exclusive basis on behalf of any national 

securities exchange or registered 

securities association, or any national 

securities exchange or registered 

securities association which engages on 

an exclusive basis on its own behalf, in 

collecting, processing, or preparing for 

distribution or publication, any 

information with respect to (i) 

transactions or quotations on or 

effective or made by means of any 

facility of such exchange or (ii) 

quotations distributed or published by 

means of any electronic quotation 

system operated by such association. 

The Federal securities laws require that 

before the commission may approve the 

registration of an exclusive SIP, it must 

make certain mandatory findings. It 

takes a SIP applicant approximately 400 

hours to prepare documents which 

include sufficient information to enable 

the Commission to make those findings. 

Currently, there are only two exclusive 

SIPs registered with the Commission; 

The Securities Information Automation 

Corporation (‘‘SIAC’’) and The Nasdaq 

Stock Market, LLC (‘‘Nasdaq’’). SIAC and 

Nasdaq are required to keep the 

information on file with the 

Commission current, which entails 

filing a form SIP annually to update 

information. 

Accordingly, the annual reporting and 

recordkeeping burden for Rule 609 and 

Form SIP is 400 hours; the burden of 

information collection is estimated to 

involve approximately 1 respondent 

application for registration making 1 

response per year. This annual reporting 

and recordkeeping burden does not 

include the burden hours or cost of 

amending a Form SIP because the 

Commission has already overstated the 

compliance burdens by assuming that 

the Commission will receive one initial 

registration pursuant to Rule 609 on 

Form SIP a year. 

Written comments are invited on: (a) 

Whether the proposed collection of 

information is necessary for the proper 

performance of the functions of the 

agency, including whether the 

information will have practical utility; 

(b) the accuracy of the agency’s estimate 

of the burden of the collection of 

information; (c) ways to enhance the 

quality, utility, and clarity of the 

information collected; and (d) ways to 

minimize the burden of the collection of 

information on respondents, including 

through the use of automated collection 

techniques or other forms of information 

technology. Consideration will be given 

to comments and suggestions submitted 

in writing within 60 days of this 

publication. 

Please direct your written comments 

to: Thomas Bayer, Chief Information 

Officer, Securities and Exchange 

Commission, c/o Remi Pavlik-Simon, 

6432 General Green Way, Alexandria, 

Virginia 22312 or send an e-mail to: 

PRA_Mailbox@sec.gov. 

Dated: March 17, 2011. 

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–6809 Filed 3–22–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[File No. 500–1] 

In the Matter of Heli Electronics Corp., 

Order of Suspension of Trading 

March 21, 2011. 

It appears to the Securities and 

Exchange Commission that there is a 

lack of current and accurate information 

concerning the securities of Heli 

Electronics Corp. (‘‘HELI’’), a Nevada 

corporation with headquarters and 

operations in the People’s Republic of 

China, which trades in the over-thecounter market under the symbol 

‘‘HELI.’’ 

Questions have arisen regarding the 

accuracy and completeness of 

information contained in HELI’s public 

filings with the Commission concerning, 

among other things, the company’s cash 

balances and accounts receivable. The 

company has failed to disclose that the 

company’s independent auditor has 

resigned due to accounting irregularities 

involving (a) discrepancies between 

HELI’s accounting records for cash 

balances and official bank statements 

obtained by the auditors from the 

company’s bank, (b) discrepancies 

concerning the existence and location of 

company customers, and (c) the 

possibility that accounting records 

could have been falsified. Due to these 

irregularities, the company’s auditor has 

resigned from its engagement to audit 

the company’s consolidated financial 

statements for the year ended December 

31, 2010, and has withdrawn its audit 

opinion issued June 15, 2010 relating to 

the audit of the company’s consolidated 

financial statements as of December 31, 

2009 and 2008. 

The Commission is of the opinion that 

the public interest and the protection of 

investors require a suspension of trading 

in the securities of the above-listed 

company. 

Therefore, it is ordered, pursuant to 

Section 12(k) of the Securities Exchange 

Act of 1934, that trading in the abovelisted company is suspended for the 

period from 9:30 a.m. EDT, March 21, 

2011, through 11:59 p.m. EDT, on April 

1, 2011. 

By the Commission. 

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2011–6943 Filed 3–21–11; 4:15 pm] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–64090; File No. SR–BX– 

2011–007] 

Self-Regulatory Organizations; 

NASDAQ OMX BX LLC; Order 

Approving a Proposed Rule Change 

Relating to Permanent Approval of the 

BX and NES Inbound Routing 

Relationship 

March 17, 2011. 

I. Introduction 

On January 28, 2011, NASDAQ OMX 

BX LLC (‘‘BX’’ or ‘‘Exchange’’) 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 


jlentini on DSKJ8SOYB1PROD with NOTICES
Federal Register / Vol. 76, No. 56 / Wednesday, March 23, 2011 / Notices 16463 

3See Securities Exchange Act Release No. 63859 

(February 7, 2011), 76 FR 8391 (‘‘Notice’’). 

4 15 U.S.C. 78s(b). 

5See Securities Exchange Act Release No. 58324 

(August 7, 2008), 73 FR 46936 (August 12, 2008) 

(SR–BSE–2008–02; SR–BSE–2008–23; SR–BSE– 

2008–25; SR–BSECC–2008–01) (‘‘BSE Approval 

Order’’). See also Securities Exchange Act Release 

No. 58179 (July 17, 2008), 73 FR 42874 (July 23, 

2008) (order approving NASDAQ OMX’s 

acquisition of Phlx.) 

6See BSE Approval Order, supra note 5. 

7See BSE Approval Order, supra note 5, 73 FR 

at 46944, n.117. 

8Nasdaq Rule 4751(f)(9) defines Directed Orders 

as immediate-or-cancel orders that are directed to 

an exchange other than Nasdaq without checking 

the Nasdaq book. 

9See Securities Exchange Act Release No. 59154 

(December 23, 2008), 73 FR 80468 (December 31, 

2008) (SR–BSE–2008–48) (‘‘BSE Inbound Routing 

Order’’). 

10See Notice, supra note 3. 

11 In approving this proposed rule change, the 

Commission has considered the proposed rule’s 

impact on efficiency, competition and capital 

formation. 15 U.S.C. 78c(f). 

12 15 U.S.C. 78f(b)(1). 

13 15 U.S.C. 78f(b)(5). 

14See Nasdaq Rule 4758. See also Notice, supra 

note 3, 76 FR at 8301, n.5. 

15 Id. See also BSE Inbound Routing Order, supra 

note 9, 73 FR at 80475. 

16See BSE Approval Order, supra note 5, 73 FR 

at 46944. 

17See BSE Inbound Routing Order, supra note 9, 

73 FR at 80475. 

18See Notice, supra note 3, 73 FR at 8391–8392. 

19 17 CFR 240.17d–2. 

20The Exchange also states that NES is subject to 

independent oversight by FINRA, its Designated 

Examining Authority, for compliance with financial 

responsibility requirements. See Notice, supra note 

3, 76 FR at 8391, n.9. 

change requesting permanent approval 

of the Exchange’s pilot program to 

permit the Exchange to accept inbound 

orders that Nasdaq Execution Services, 

LLC (‘‘NES’’) routes in its capacity as a 

facility of The NASDAQ Stock Market 

LLC (‘‘Nasdaq’’), with certain obligations 

and conditions. The proposed rule 

change was published for comment in 

the Federal Register on February 14, 

2011.3 The Commission received no 

comment letters regarding the proposed 

rule change. This order approves the 

proposed rule change. 

II. Background 

BX Equity Rule 2140(a) prohibits the 

Exchange or any entity with which it is 

affiliated from acquiring or maintaining 

an ownership interest in a member in 

the absence of an effective filing under 

Section 19(b) of the Act.4 NES is a 

broker-dealer that is a member of the 

Exchange, and currently provides to 

Nasdaq members optional routing 

services to other market centers. NES is 

owned by The NASDAQ OMX Group, 

Inc. (‘‘NASDAQ OMX’’), which also 

owns three registered securities 

exchanges—Nasdaq, the Exchange, and 

NASDAQ OMX PHLX LLC.5 Thus, NES 

is an affiliate of each of these exchanges. 

Absent an effective filing, BX Equity 

Rule 2140(a) would prohibit NES from 

being a member of the Exchange. 

On August 7, 2008, in connection 

with the acquisition of the Exchange by 

NASDAQ OMX, the Commission, 

approved an affiliation between the 

Exchange and NES for the limited 

purpose of permitting NES to provide 

routing services for Nasdaq for orders 

that first attempt to access liquidity on 

Nasdaq’s system before routing to the 

Exchange, subject to certain other 

limitations and conditions.6 At the time 

of NASDAQ OMX’s acquisition of the 

Exchange, the Exchange was not trading 

equity securities.7 On December 23, 

2008, in connection with the Exchange’s 

resumption of equity trading, the 

Commission approved a modification to 

the conditions for the affiliation 

between NES and the Exchange, to 

permit the Exchange to receive orders 

routed by NES in its capacity as a 

facility of Nasdaq (including ‘‘Directed 

Orders’’),8 on a one-year pilot basis.9

The Exchange is now proposing to make 

such approval permanent.10

III. Discussion and Commission 

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.11 Specifically, the 

Commission finds that the proposed 

rule change is consistent with Section 

6(b)(1) of the Act,12 which requires, 

among other things, that a national 

securities exchange be so organized and 

have the capacity to carry out the 

purposes of the Act, and to comply and 

enforce compliance by its members and 

persons associated with its members, 

with the provisions of the Act, the rules 

and regulation thereunder, and the rules 

of the Exchange. Further, the 

Commission finds that the proposed 

rule change is consistent with Section 

6(b)(5) of the Act,13 which requires, 

among other things, that the rules of a 

national securities exchange be 

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, and 

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, in general, to protect 

investors and the public interest. 

Section 6(b)(5) also requires that the 

rules of an exchange not be designed to 

permit unfair discrimination among 

customers, issuers, brokers, or dealers. 

NES operates as a facility of Nasdaq 

that provides outbound routing from 

Nasdaq to other market centers, subject 

to certain conditions.14 NES’s operation 

as a facility providing outbound routing 

services for Nasdaq is subject to the 

conditions that: (1) NES is operated and 

regulated as a facility of Nasdaq; (2) NES 

only provides outbound routing services 

unless otherwise approved by the 

Commission; (3) the designated 

examining authority of NES is a selfregulatory organization unaffiliated with 

Nasdaq; and (4) the use of NES for 

outbound routing is available only to 

Nasdaq members and the use of NES 

remains optional.15

The operation of NES as a facility of 

Nasdaq providing outbound routing 

services from that exchange will be 

subject to Nasdaq oversight, as well as 

Commission oversight. Nasdaq will be 

responsible for ensuring that NES’s 

outbound routing function is operated 

consistent with Section 6 of the Act and 

Nasdaq rules. In addition, Nasdaq must 

file with the Commission rule changes 

and fees relating to NES’s outbound 

routing function. 

Recognizing that the Commission has 

previously expressed concern regarding 

the potential for conflicts of interest in 

instances where a member firm is 

affiliated with an exchange of which it 

is a member, the Exchange previously 

proposed, and the Commission 

approved, limitations and conditions on 

NES’s affiliation with the Exchange.16

Also recognizing that the Commission 

has expressed concern regarding the 

potential for conflicts of interest in 

instances where a member firm is 

affiliated with an exchange to which it 

is routing orders, the Exchange 

previously proposed, and the 

Commission approved,17 NES’s 

affiliation with the Exchange to permit 

the Exchange to accept inbound orders 

that NES routes in its capacity as a 

facility of Nasdaq, subject to the 

following limitations and conditions, 

which the Exchange states it has met: 18

• First, the Exchange and FINRA will 

enter into a Regulatory Contract, as well 

as an agreement pursuant to Rule 17d– 

2 under the Act (‘‘17d–2 Agreement’’).19

Pursuant to the Regulatory Contract and 

the 17d–2 Agreement, FINRA will be 

allocated regulatory responsibilities to 

review NES’s compliance with certain 

Exchange rules.20 Pursuant to the 

Regulatory Contract, however, BX 


jlentini on DSKJ8SOYB1PROD with NOTICES
16464 Federal Register / Vol. 76, No. 56 / Wednesday, March 23, 2011 / Notices 

21Pursuant to the Regulatory Contract, both 

FINRA and the Exchange will collect and maintain 

all alerts, complaints, investigations and 

enforcement actions in which NES (in its capacity 

as a facility of Nasdaq routing orders to the 

Exchange) is identified as a participant that has 

potentially violated applicable Commission or 

Exchange rules. The Exchange and FINRA will 

retain these records in an easily accessible manner 

in order to facilitate any potential review conducted 

by the Commission’s Office of Compliance 

Inspections and Examinations. See Notice, supra 

note 3, 76 FR at 8391, n.10 

22See Notice, supra note 3, 76 FR at 8392. 

23See BX Equity Rule 2140(c). See also Notice, 

supra note 3, 76 FR at 8392. 

24See Notice, supra note 3, 76 FR at 8392. The 

Commission notes that the original pilot period of 

twelve months was approved and began on 

December 23, 2008, but was extended several times. 

See Notice, supra note 3, 76 FR at 8391, n.6 and 

accompanying text. 

25See Notice, supra note 3, 76 FR at 8392. 

26See, e.g., Securities Exchange Act Release Nos. 

54170 (July 18, 2006), 71 FR 42149 (July 25, 2006) 

(SR–NASDAQ–2006–006) (order approving 

Nasdaq’s proposal to adopt Nasdaq Rule 2140, 

restricting affiliations between Nasdaq and its 

members); 53382 (February 27, 2006), 71 FR 11251 

(March 6, 2006) (SR–NYSE–2005–77) (order 

approving the combination of the New York Stock 

Exchange, Inc. and Archipelago Holdings, Inc.); 

58673 (September 29, 2008), 73 FR 57707 (October 

8, 2008) (SR–Amex–2008–62) (order approving the 

combination of NYSE Euronext and the American 

Stock Exchange LLC); 59135 (December 22, 2008), 

73 FR 79954 (December 30, 2008) (SR–ISE–2009– 

85) (order approving the purchase by ISE Holdings 

of an ownership interest in DirectEdge Holdings 

LLC); and 59281 (January 22, 2009), 74 FR 5014 

(January 28, 2009) (SR–NYSE–2008–120) (order 

approving a joint venture between NYSE and BIDS 

Holdings L.P.). 

27This oversight will be accomplished through 

the 17d–2 Agreement between FINRA and the 

Exchange and the Regulatory Contract. 

28 15 U.S.C. 78s(b)(2). 

29 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. 63761 

(January 25, 2011), 76 FR 5412 (‘‘Notice’’). 

4An IXPMM is defined in new ISE Rule 2013(a) 

as a primary market maker in Eligible Index 

Options traded on the Exchange pursuant to new 

ISE Rule 2013. 

5An IXCMM is defined in new ISE Rule 2013(a) 

as a competitive market maker in Eligible Index 

Options traded on the Exchange pursuant to new 

ISE Rule 2013. 

retains ultimate responsibility for 

enforcing its rules with respect to NES. 

• Second, FINRA will monitor NES 

for compliance with the Exchange’s 

trading rules, and will collect and 

maintain certain related information.21

• Third, FINRA will provide a report 

to the Exchange’s chief regulatory 

officer (‘‘CRO’’), on a quarterly basis, 

that: (i) Quantifies all alerts (of which 

FINRA is aware) that identify NES as a 

participant that has potentially violated 

Commission or Exchange rules, and (ii) 

lists all investigations that identify NES 

as a participant that has potentially 

violated Commission or Exchange 

rules.22

• Fourth, the Exchange has adopted 

BX Equity Rule 2140(c), which requires 

NASDAQ OMX, as the holding 

company owning both the Exchange and 

NES, to establish and maintain 

procedures and internal controls 

reasonably designed to ensure that NES 

does not develop or implement changes 

to its system, based on non-public 

information obtained regarding planned 

changes to the Exchange’s systems as a 

result of its affiliation with the 

Exchange, until such information is 

available generally to similarly situated 

Exchange members, in connection with 

the provision of inbound order routing 

to the Exchange.23

• Fifth, routing of orders from NES to 

the Exchange, in NES’s capacity as a 

facility of Nasdaq, was authorized for a 

pilot period of twelve months.24

The Exchange believes that by 

meeting the above-listed conditions it 

has set up mechanisms that protect the 

independence of the Exchange’s 

regulatory responsibility with respect to 

NES, and has demonstrated that NES 

cannot use any information advantage it 

may have because of its affiliation with 

the Exchange.25

In the past, the Commission has 

expressed concern that the affiliation of 

an exchange with one of its members 

raises potential conflicts of interest, and 

the potential for unfair competitive 

advantage.26 Although the Commission 

continues to be concerned about 

potential unfair competition and 

conflicts of interest between an 

exchange’s self-regulatory obligations 

and its commercial interest when the 

exchange is affiliated with one of its 

members, for the reasons discussed 

below, the Commission believes that it 

is consistent with the Act to permit NES 

to provide inbound routing to the 

Exchange on a permanent basis instead 

of a pilot basis, subject to the other 

conditions described above. 

The Exchange has proposed four 

ongoing conditions applicable to NES’s 

routing activities, which are enumerated 

above. The Commission believes that 

these conditions mitigate its concerns 

about potential conflicts of interest and 

unfair competitive advantage. In 

particular, the Commission believes that 

FINRA’s oversight of NES,27 combined 

with FINRA’s monitoring of NES’s 

compliance with the equity trading 

rules and quarterly reporting to the 

Exchange’s CRO, will help to protect the 

independence of the Exchange’s 

regulatory responsibilities with respect 

to NES. The Commission also believes 

that BX Equity Rule 2140(c) is designed 

to ensure that NES cannot use any 

information advantage it may have 

because of its affiliation with the 

Exchange. 

V. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,28 that the 

proposed rule change (SR–BX–2011– 

007) be, and hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.29

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–6785 Filed 3–22–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–64091; File No. SR–ISE– 

2011–04] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Order Approving a Proposed 

Rule Change To Establish New 

Classes of Market Makers for Index 

Options 

March 17, 2011. 

I. Introduction 

On January 12, 2011, the International 

Securities Exchange, LLC (‘‘ISE’’ or 

‘‘Exchange’’) 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 its rules to establish two new 

classes of market makers for index 

options traded on the Exchange. The 

proposed rule change was published for 

comment in the Federal Register on 

January 31, 2011.3 The Commission 

received no comments regarding the 

proposal. This order approves the 

proposed rule change. 

II. Description of the Proposal 

The Exchange proposed to amend its 

rules to establish the following new 

classes of market makers for certain 

index options traded on the Exchange: 

Index Options Primary Market Makers 

(‘‘IXPMM’’) 4 and Index Options 

Competitive Market Makers 

(‘‘IXCMM’’),5 collectively referred to as 

IXMMs. 

The Exchange’s proposal to separate 

out and introduce a new class of market 

maker trading licenses that are specific 

to index options is intended to allow an 

opportunity for additional market 


jlentini on DSKJ8SOYB1PROD with NOTICES