2940 Federal Register / Vol. 76, No. 11 / Tuesday, January 18, 2011 / Notices 

8 17 CFR 240.19b–4(f)(6). 

9 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Securities Exchange Act Release No. 63367 

(November 23, 2010), 75 FR 74755 (‘‘Notice’’). 

4Rule 1092 provides a framework for reviewing 

the price of a transaction to determine whether that 

price was an ‘‘obvious error’’ pursuant to objective 

standards. When a participant believes he/she 

received one or more executions at an erroneous 

price, a participant may notify the Options 

Exchange Officials (‘‘OEOs’’) and request the review 

of a trade as a possible obvious error. An obvious 

error will be deemed to have occurred when the 

execution price of a transaction is higher or lower 

than the theoretical price for a series by a certain 

amount depending on the type of option. OEOs use 

one of three criteria when determining the 

theoretical price of an options execution, which are 

enumerated in Rule 1092(b). The theoretical price 

is then compared to an obvious/catastrophic error 

chart within Rule 1092(a). If the transaction price 

meets this threshold, the transaction may be 

adjusted or nullified. 

5See proposed Rule 1092(c)(v)(A). This would 

occur when a complex order executes against 

another complex order, with each piece executing 

through the System against each other. The Notice 

provides the following example of such a trade. 

Assume a customer trades a call spread at a net 

price of $0.50 by buying the January 50 calls at 

$3.00 and selling the January 55 calls at $2.50. If 

the January 50 calls should have been trading at 

$7.00 and thus met the obvious error threshold in 

Rule 1092, then the entire complex trade would be 

nullified only if the January 50 and 55 calls traded 

as a complex order against another complex order, 

rather than as two separate trades. Currently, the 

trade involving the January 50 calls is nullified and 

the January 55 Calls trade would stand, which, 

according to the Exchange, likely was not intended 

by either party. 

6 In approving this proposed rule change, the 

Commission has considered the proposed rule’s 

not impose any significant burden on 

competition, and (3) does not become 

operative for 30 days from the date on 

which it was filed, or such shorter time 

as the Commission may designate. The 

Exchange provided the Commission 

with written notice of its 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, 

or such shorter time as designated by 

the Commission.8

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 Exchange 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–BX–2011–001 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–BX–2011–001. 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 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–BX– 

2011–001 and should be submitted on 

or before February 8, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2011–892 Filed 1–14–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63692; File No. SR–Phlx– 

2010–163] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX LLC; Order 

Granting Approval of Proposed Rule 

Change Relating to Obvious Errors 

Respecting Complex Trades 

January 11, 2011. 

On November 17, 2010, NASDAQ 

OMX PHLX LLC (‘‘Phlx’’ 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 Rule 1092, Obvious 

Errors and Catastrophic Errors, to 

address obvious and catastrophic errors 

involving complex orders. The proposed 

rule change was published for comment 

in the Federal Register on December 1, 

2010.3 The Commission received no 

comment letters on the proposal. This 

order approves the proposed rule 

change. 

The proposed rule change would 

amend Rule 1092, Obvious Errors and 

Catastrophic Errors, to address obvious 

and catastrophic errors involving trades 

of one complex order against another 

complex order. Specifically, the 

proposal is designed to address a 

situation in which one component (or 

leg) of a complex order is deemed an 

obvious (or catastrophic) error, but the 

other component(s) are not. In such 

situation, the proposed rule change 

would permit all legs of a complex order 

execution to be nullified when one leg 

of such complex order can be nullified 

as an obvious or catastrophic error 

under Rule 1092,4 provided that the 

execution involved a complex order 

executing against another complex order 

(such that all of the same parties are 

involved in the trade).5 The proposed 

rule does not address complex orders 

that do not trade against other complex 

orders. 

In addition, the proposal would make 

three minor corrections: (i) A reference 

in Rule 1092(b)(ii) to Rule 

1014(c)(1)(A)(i)(a) is inverted and 

should instead say Rule 

1014(c)(i)(A)(1)(a); (ii) the words 

‘‘obvious error’’ in Rule 1092(e)(i)(B) are 

being capitalized to match the rest of the 

rule; and (iii) a reference to ‘‘AUTOM’’ 

in Rule 1092(e)(ii) is outdated and will 

be deleted, leaving reference to the 

‘‘Help Desk.’’ 

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 6 and, in particular, the 

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Federal Register / Vol. 76, No. 11 / Tuesday, January 18, 2011 / Notices 2941 

impact on efficiency, competition, and capital 

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

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

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

9See, e.g., Securities Exchange Release Nos. 

58778 (October 14, 2008), 73 FR 62577 (October 21, 

2008) and 54228 (July 27, 2006), 71 FR 44066 

(August 3, 2006) (SR–CBOE–2006–14) (approving 

revisions to CBOE’s Obvious Error Rules). 

10See Notice, supra note 3. 

11 15 U.S.C. 78s(b)(2). 

12 17 CFR 200.30–3(a)(12). 

requirements of Section 6(b) of the Act 7

and the rules and regulations 

thereunder. Specifically, the 

Commission finds that the proposal is 

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

Act,8 in that the proposal is designed to 

promote just and equitable principles of 

trade, to prevent fraudulent and 

manipulative acts, to remove 

impediments to and to perfect the 

mechanism for a free and open market 

and a national market system, and, in 

general, to protect investors and the 

public interest. 

The Commission notes that, in 

approving proposals relating to 

adjustment or nullification of trades 

involving obvious errors, it has stated 

that the determination of whether an 

obvious error has occurred and the 

process for reviewing such a 

determination should be based on 

specific and objective criteria and 

subject to specific and objective 

procedures.9 The Commission notes that 

the proposed change to Rule 1092 

provides specific and objective 

procedures for determining whether a 

trade should be nullified. The purpose 

of the new provision is to provide that 

obvious and catastrophic errors related 

to complex orders that trade against 

other complex orders will be nullified. 

The Commission also notes that the 

proposed rule change, by providing that 

obvious and catastrophic errors related 

to complex orders that trade against 

other complex orders will be nullified, 

is designed to mitigate the risk to both 

parties to a complex order trade 

involving two complex orders, neither 

or whom, according to the Exchange, 

intended to end up with just one piece 

of the complex order.10 Therefore, the 

Commission believes that the proposed 

rule change is consistent with the Act. 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,11 that the 

proposed rule change (SR–Phlx–2010– 

163) is hereby approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2011–891 Filed 1–14–11; 8:45 am] 

BILLING CODE 8011–01–P 

DEPARTMENT OF STATE 

[Public Notice: 7301] 

Bureau of Political-Military Affairs: 

Directorate of Defense Trade Controls; 

Notifications to the Congress of 

Proposed Commercial Export Licenses 

SUMMARY: Notice is hereby given that 

the Department of State has forwarded 

the attached Notifications of Proposed 

Export Licenses to the Congress on the 

dates indicated on the attachments 

pursuant to sections 36(c) and 36(d) and 

in compliance with section 36(f) of the 

Arms Export Control Act (22 U.S.C. 

2776). 

DATES: Effective Date: As shown on each 

of the 14 letters. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Robert S. Kovac, Managing Director, 

Directorate of Defense Trade Controls, 

Bureau of Political-Military Affairs, 

Department of State (202) 663–2861. 

SUPPLEMENTARY INFORMATION: Section 

36(f) of the Arms Export Control Act 

mandates that notifications to the 

Congress pursuant to sections 36(c) and 

36(d) must be published in the Federal 

Register when they are transmitted to 

Congress or as soon thereafter as 

practicable. 

December 1, 2010 (Transmittal No. 

DDTC 10–103) 

Hon. Nancy Pelosi, 

Speaker of the House of Representatives. 

Dear Madam Speaker: Pursuant to 

Section 36(c) of the Arms Export 

Control Act, I am transmitting, 

herewith, certification of a proposed 

technical assistance agreement to 

include the export of defense articles, to 

include technical data, and defense 

services in the amount of $100,000,000 

or more. 

The transaction contained in the 

attached certification involves the 

transfer of defense articles, to include 

technical data, and defense services to 

support the design, manufacture and 

delivery of the Anik G1 Commercial 

Communication Satellite to Canada. 

The United States Government is 

prepared to license the export of these 

items having taken into account 

political, military, economic, human 

rights, and arms control considerations. 

More detailed information is 

contained in the formal certification 

which, though unclassified, contains 

business information submitted to the 

Department of State by the applicant, 

publication of which could cause 

competitive harm to the United States 

firm concerned. 

Sincerely, 

Matthew Rooney, 

Principal Deputy Assistant Secretary, 

Legislative Affairs. 

November 19, 2010 (Transmittal No. 

DDTC 10–104) 

Hon. Nancy Pelosi, 

Speaker of the House of Representatives. 

Dear Madam Speaker: Pursuant to 

Section 36(c) of the Arms Export 

Control Act, I am transmitting, 

herewith, certification of a proposed 

manufacturing license agreement to 

include the export of defense articles, to 

include technical data, and defense 

services in the amount of $50,000,000 or 

more. 

The transaction contained in the 

attached certification involves the 

export of defense articles, including 

technical data, and defense services to 

Saudi Arabia for the operation and 

maintenance of the Saudi Ministry of 

Defense and Aviation, and the Royal 

Saudi Air Defense Forces HAWK and 

PATRIOT Air Defense Missile Systems. 

The United States Government is 

prepared to license the export of these 

items having taken into account 

political, military, economic, human 

rights, and arms control considerations. 

More detailed information is 

contained in the formal certification 

which, though unclassified, contains 

business information submitted to the 

Department of State by the applicant, 

publication of which could cause 

competitive harm to the United States 

firm concerned. 

Sincerely, 

Richard R. Verma, 

Deputy Assistant Secretary, Legislative 

Affairs. 

December 6, 2010 (Transmittal No. 

DDTC 10–105) 

Hon. Nancy Pelosi, 

Speaker of the House of Representatives. 

Dear Madam Speaker: Pursuant to 

Section 36(c) of the Arms Export 

Control Act, I am transmitting, 

herewith, certification of a proposed 

amendment to a Technical Assistance 

Agreement for the export of defense 

articles, to include technical data, and 

defense services in the amount of 

$100,000,000 or more. 

The transaction contained in the 

attached certification involves the 

export of defense articles, including 

technical data, and defense services for 

the development, production and test of 

the APS–508 Radar System for the CP– 

140 Aircraft Program. 

The United States Government is 

prepared to license the export of these 

items having taken into account 

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