16466 Federal Register / Vol. 76, No. 56 / Wednesday, March 23, 2011 / Notices 

18 IXCMM trading licenses sold during a calendar 

year will be prorated to reflect the number of 

trading days in the year. See new ISE Rule 

2013(f)(2). 

19See Notice, supra note 3, 76 FR at 5414. 

20For example, IXPMMs will enjoy privileges that 

include, among other things, participation rights 

and small order execution preference while 

accepting responsibilities that include, among other 

things, the obligation to provide continuous 

quotations in an Eligible Index Option for which it 

has been allocated, to conducting the opening 

rotation on a daily basis for as long as the IXPMM 

retains an allocation in an Eligible Index Option. 

21 15 U.S.C. 78f(b)(5). In approving this proposed 

rule change, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

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

22See supra note 20. 

23See new ISE Rule 2013(e)(3). 

24See new ISE Rule 2013(e)(4). 

25See new ISE Rule 2013(f). 

26 15 U.S.C. 78s(b)(2). 

27 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

time during a calendar year.18 All 

IXCMM trading licenses will expire at 

the end of the calendar year in which 

they are issued but, upon request by a 

PMM or CMM, will be renewed for 

subsequent years on an annual basis.19

IXMM Duties and Privileges. By 

amending ISE Rule 802(b) to permit the 

allocation of Eligible Index Options, 

subject to new Rule 2013, ISE is 

subjecting market makers in Eligible 

Index Options to the obligations 

imposed on Exchange market makers 

under Chapter 8 of the Exchange’s rules. 

Accordingly, once an IXPMM obtains a 

trading license in an Eligible Index 

Option, the IXPMM will have all of the 

responsibilities and privileges of a PMM 

under the Exchange’s rules.20 Similarly, 

once an IXCMM obtains a trading 

license in an Eligible Index Option, the 

IXCMM will have all the responsibilities 

and privileges under the Exchange’s 

rules. 

After an IXPMM has purchased a 

trading license, the IXPMM may 

terminate its status as IXPMM in an 

index option if the IXPMM is unable to 

meet its obligations, provided the 

IXPMM gives at least 60 days prior 

written notice to the Exchange of such 

termination. In the event the Exchange 

is unable to re-allocate the IXPMM’s 

index option product within the notice 

period and the index option product is 

singly listed on ISE, then the IXPMM 

will be required to continue to fulfill its 

obligations in that product until all 

open interest has been closed. An 

IXCMM may terminate its trading 

license prior to its scheduled expiration 

by providing at least 10 days prior 

written notice to the Exchange. 

III. Discussion 

The Commission finds that the 

proposed rule change is consistent with 

the requirements of Section 6(b)(5) of 

the Act,21 which requires, among other 

things, that the rules of a national 

securities exchange be designed to 

promote just and equitable principles of 

trade, to remove impediments to, and 

perfect the mechanism of, a free and 

open market and a national market 

system and, in general, to protect 

investors and the public interest. 

The Commission believes that the 

provisions governing the two new 

classes of market makers that will be 

permitted to trade Eligible Index 

Options and Legacy Index Options on 

the Exchange, IXPMMs and IXCMMs, 

are consistent with the Act. The 

Commission notes that IXPMMs and 

IXCMMs will be subject to identical 

obligations that correspond to the 

market making obligations applicable to 

First Market PMMs and CMMs, 

respectively.22 The Commission notes 

that, to obtain a trading license, 

IXPMMs will be required to provide the 

Exchange with market quality 

commitments 23 and, if an IXPMM 

continuously fails to meet its stated 

market quality commitments, the 

Exchange may terminate its IXPMM 

allocation.24

The Commission believes that the 

procedures under which the Exchange 

proposes to offer IXMM licenses are 

reasonably designed to award such 

allocations in a fair and reasonable 

manner. In particular, the Commission 

believes that provisions governing 

IXCMM trading licenses are designed to 

ensure that market maker trading 

licenses will be widely available 

because the Exchange will make an 

unlimited amount of IXCMM licenses 

available for purchase by members who 

are not PMMs or CMMs on the 

Exchange’s First Market.25 In addition, 

the requirement that bidders provide 

market quality commitment in addition 

to their bid for an IXPMM allocation 

will allow the Exchange to grant IXPMM 

trading licenses in an objective manner 

without awarding a trading license 

solely based on the highest bid. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,26 that the 

proposed rule change (SR–ISE–2011–04) 

be, and hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.27

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–6786 Filed 3–22–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–64095; File No. SR–EDGX– 

2011–06] 

Self-Regulatory Organizations; Notice 

of Filing and Order Granting 

Accelerated Approval of Proposed 

Rule Change by EDGX Exchange, Inc. 

To Delete the Description of and All 

References to Step-Up Orders in EDGX 

Rules 

March 18, 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 March 10, 2011, 

EDGX Exchange, Inc. (‘‘EDGX’’ or 

‘‘Exchange’’) 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 Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons, and is 

approving the proposal on an 

accelerated basis. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend its 

Rules 11.5(c)(11) and Rule 11.9(b)(1)(C) 

to delete the description of and all 

references to Step-Up orders. The text of 

the proposed rule change is attached as 

Exhibit 5 and is available on the 

Exchange’s Web site at 

http:/www.directedge.com, at the 

Exchange’s principal office, and at the 

Public Reference Room of the 

Commission. 

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 

self-regulatory organization has 

prepared summaries, set forth in 

Sections A, B and C below, of the most 

significant aspects of such statements. 


jlentini on DSKJ8SOYB1PROD with NOTICES
Federal Register / Vol. 76, No. 56 / Wednesday, March 23, 2011 / Notices 16467 

3See Securities Exchange Act Release No. 63336 

(November 18, 2010, 75 FR 71781. Amendment No. 

2 replaced in its entirety the original filing, SR– 

EDGX–2010–17 (November 8, 2010) and partial 

Amendment No. 1 (November 23, 2010). See 

Securities Exchange Act Release No. 63574 

(December 17, 2010), 75 FR 80876. 

4Exchange Rule 1.5(cc) defines a User as any ‘‘any 

Member or Sponsored Participant who is 

authorized to obtain access to the System pursuant 

to Rule 11.3.’’ 

5See Securities Exchange Act Release No. 63930 

(February 18, 2011), 76 FR 10414 (SR–EDGX–2010– 

17). 

6 15 U.S.C. 78f(b)(5). 

7 In approving the proposed rule change, the 

Commission notes that it has considered the 

proposed rule’s impact on efficiency, competition, 

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

8 15 U.S.C. 78f(b)(5). 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

EDGX filed with the Securities and 

Exchange Commission (‘‘Commission’’) a 

proposed rule change to amend EDGX 

Rule 11.9 regarding the description of 

the Step-up order type and modify how 

Step-up orders would be processed 

pursuant to Exchange Rule 11.9.3

Exchange Rule 11.5(c)(11) defines a 

Step-up order as a ‘‘market or limit order 

with the instruction that the System 

display the order to Users at or within 

the NBBO price pursuant to Rule 

11.9(b)(1)(C).’’ Exchange Rule 

11.9(b)(1)(C), in turn, states that orders 

shall be displayed to Users 4 in a 

manner that is separately identifiable 

from other Exchange orders, at or within 

the NBBO price for a period of time not 

to exceed five hundred milliseconds, as 

determined by the Exchange. 

In light of the Commission’s order 

instituting proceedings to determine 

whether to disapprove the abovereferenced proposed rule change,5 the 

Exchange withdrew the filing 

mentioned above on February 25, 2011 

and ceased offering the Step-up order as 

of the close of business on February 28, 

2011. 

The Exchange now proposes to delete 

rules that reference Step-up orders. 

Therefore, it is proposing to delete Rules 

11.5(c)(11) and 11.9(b)(1)(C). As a result, 

conforming changes have been made to 

re-number current Rules 11.5(c)(12)– 

(14) as Rules 11.5(c)(11)–(13). In 

addition, a conforming change is 

proposed to re-number the reference to 

Discretionary Orders, as set forth in 

Rule 11.8(a)(2)(D). 

2. Statutory Basis 

The statutory basis for the proposed 

rule change is Section 6(b)(5) of the Act 

of,6 which requires the rules of an 

exchange to promote just and equitable 

principles of trade, to remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system and, in 

general, to protect investors and the 

public interest. Since the Step-up order 

type was an enhanced functionality 

offered by the Exchange not required 

under the Act, the Exchange would like 

to remove references to it from its 

rulebook. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The proposed rule change does not 

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 

The Exchange has not solicited, and 

does not intend to solicit, comments on 

this proposed rule change. The 

Exchange has not received any 

unsolicited written comments from 

members or other interested parties. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period (i) 

as the Commission may designate up to 

90 days of such date if it finds such 

longer period to be appropriate and 

publishes its reasons for so finding or 

(ii) as to which the self-regulatory 

organization consents, the Commission 

will: 

(a) By order approve or disapprove 

such proposed rule change; or 

(b) Institute proceedings to determine 

whether the proposed rule change 

should be 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–EDGX–2011–06 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–EDGX–2011–06. 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 

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–EDGX– 

2011–06 and should be submitted on or 

before April 13, 2011. 

V. Commission’s Findings and Order 

Granting Accelerated Approval of a 

Proposed Rule Change 

After careful consideration, 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.7 In 

particular, the Commission finds that 

the proposed rule change is consistent 

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

of the Act,8 which requires, among other 

things, that the Exchange’s rules be 

designed 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 a national market system, 

and in general, to protect investors and 


jlentini on DSKJ8SOYB1PROD with NOTICES
16468 Federal Register / Vol. 76, No. 56 / Wednesday, March 23, 2011 / Notices 

9See supra Section II.A.2. 

10 15 U.S.C. 78s(b)(2). 

11 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. 63335 

(November 18, 2010, 75 FR71783. Amendment No. 

2 replaced in its entirety the original filing, SR– 

EDGA–2010–18 (November 8, 2010) and partial 

Amendment No. 1 (November 23, 2010). See 

Securities Exchange Act Release No. 63572 

(December 17, 2010), 75 FR 80873. 

4Exchange Rule 1.5(cc) defines a User as any ‘‘any 

Member or Sponsored Participant who is 

authorized to obtain access to the System pursuant 

to Rule 11.3.’’ 

5See Securities Exchange Act Release No. 63929 

(February 18, 2011), 76 FR10416 (SR–EDGA–2010– 

18). 

6 15 U.S.C. 78f(b)(5). 

the public interest. The Commission 

agrees with the Exchange that the StepUp order type is a functionality that is 

not required under the Act.9

The Commission finds good cause, 

pursuant to Section 19(b)(2) of the 

Act,10 for approving the proposed rule 

change prior to the 30th day after 

publication of notice in the Federal 

Register. Accelerated approval will 

allow the Exchange to delete references 

to an order type in its rules that is not 

required under the Act and that the 

Exchange has determined to 

discontinue. 

VI. Conclusion 

It is therefore ordered, pursuant to 

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

proposed rule change (SR–EDGX–2011– 

06) is hereby approved on an 

accelerated basis. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–6837 Filed 3–22–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–64094; File No. SR–EDGA– 

2011–07] 

Self-Regulatory Organizations; Notice 

of Filing and Order Granting 

Accelerated Approval of Proposed 

Rule Change by EDGA Exchange, Inc. 

To Delete the Description of and All 

References to Step-Up Orders in EDGA 

Rules 

March 18, 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 March 10, 

2011, EDGA Exchange, Inc. (‘‘EDGA’’ or 

‘‘Exchange’’) 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 Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons, and is 

approving the proposal on an 

accelerated basis. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend its 

Rules 11.5(c)(11) and Rule 11.9(b)(1)(C) 

to delete the description of and all 

references to Step-Up orders. The text of 

the proposed rule change is attached as 

Exhibit 5 and is available on the 

Exchange’s Web site at http:// 

www.directedge.com, at the Exchange’s 

principal office, and at the Public 

Reference Room of the Commission. 

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 

self-regulatory organization 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 

EDGA filed with the Securities and 

Exchange Commission (‘‘Commission’’) a 

proposed rule change to amend EDGA 

Rule 11.9 regarding the description of 

the Step-up order type and modify how 

Step-up orders would be processed 

pursuant to Exchange Rule 11.9.3

Exchange Rule 11.5(c)(11) defines a 

Step-up order as a ‘‘market or limit order 

with the instruction that the System 

display the order to Users at or within 

the NBBO price pursuant to Rule 

11.9(b)(1)(C).’’ Exchange Rule 

11.9(b)(1)(C), in turn, states that orders 

shall be displayed to Users 4 in a 

manner that is separately identifiable 

from other Exchange orders, at or within 

the NBBO price for a period of time not 

to exceed five hundred milliseconds, as 

determined by the Exchange. 

In light of the Commission’s order 

instituting proceedings to determine 

whether to disapprove the abovereferenced proposed rule change,5 the 

Exchange withdrew the filing 

mentioned above on February 25, 2011 

and ceased offering the Step-up order as 

of the close of business on February 28, 

2011. 

The Exchange now proposes to delete 

rules that reference Step-up orders. 

Therefore, it is proposing to delete Rules 

11.5(c)(11) and 11.9(b)(1)(C). As a result, 

conforming changes have been made to 

re-number current Rules 11.5(c)(12)– 

(14) as Rules 11.5(c)(11)–(13). In 

addition, a conforming change is 

proposed to re-number the reference to 

Discretionary Orders, as set forth in 

Rule 11.8(a)(2)(C). 

2. Statutory Basis 

The statutory basis for the proposed 

rule change is Section 6(b)(5) of the 

Act,6 which requires the rules of an 

exchange to promote just and equitable 

principles of trade, to remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system and, in 

general, to protect investors and the 

public interest. Since the Step-up order 

type was an enhanced functionality 

offered by the Exchange not required 

under the Act, the Exchange would like 

to remove references to it from its 

rulebook. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The proposed rule change does not 

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 

The Exchange has not solicited, and 

does not intend to solicit, comments on 

this proposed rule change. The 

Exchange has not received any 

unsolicited written comments from 

members or other interested parties. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period (i) 

as the Commission may designate up to 

90 days of such date if it finds such 

longer period to be appropriate and 

publishes its reasons for so finding or 

(ii) as to which the self-regulatory 


jlentini on DSKJ8SOYB1PROD with NOTICES