Federal Register / Vol. 76, No. 80 / Tuesday, April 26, 2011 / Notices 23349 

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

2 17 CFR 240.19b–4. 

Sub-Adviser will waive fees otherwise 

payable to the Fund of Funds SubAdviser, directly or indirectly, by the 

Investing Management Company in an 

amount at least equal to any 

compensation received from a Fund or 

an Actively-Managed Fund by the Fund 

of Funds Sub-Adviser, or an affiliated 

person of the Fund of Funds SubAdviser, other than any advisory fees 

paid to the Fund of Funds Sub-Adviser 

or its affiliated person by the Fund or 

the Actively-Managed Fund, as the case 

may be, in connection with the 

investment by the Investing 

Management Company in the Fund or 

Actively-Managed Fund, as the case 

may be, made at the direction of the 

Fund of Funds Sub-Adviser. In the 

event that the Fund of Funds SubAdviser waives fees, the benefit of the 

waiver will be passed through to the 

Investing Management Company. 

7. Any sales charges and/or service 

fees charged with respect to shares of a 

Fund of Funds will not exceed the 

limits applicable to a fund of funds as 

set forth in NASD Conduct Rule 2830. 

8. Once an investment by a Fund of 

Funds in the securities of a Fund or an 

Actively-Managed Fund exceeds the 

limit in section 12(d)(1)(A)(i) of the Act, 

the board of trustees of the Fund or 

Actively-Managed Fund (‘‘Board’’), 

including a majority of directors or 

trustees who are not ‘‘interested 

persons’’ within the meaning of section 

2(a)(19) of the Act (‘‘non-interested 

Board members’’), will determine that 

any consideration paid by the Fund or 

the Actively-Managed Fund to the Fund 

of Funds or a Fund of Funds Affiliate 

in connection with any services or 

transactions: (i) Is fair and reasonable in 

relation to the nature and quality of the 

services and benefits received by the 

Fund or the Actively-Managed Fund; (ii) 

is within the range of consideration that 

the Fund or the Actively-Managed Fund 

would be required to pay to another 

unaffiliated entity in connection with 

the same services or transactions; and 

(iii) does not involve overreaching on 

the part of any person concerned. This 

condition does not apply with respect to 

any services or transactions between a 

Fund or an Actively-Managed Fund, as 

the case may be, and its investment 

adviser(s), or any person controlling, 

controlled by or under common control 

with such investment adviser(s). 

9. The Board of a Fund and of an 

Actively-Managed Fund, including a 

majority of the non-interested Board 

members, will adopt procedures 

reasonably designed to monitor any 

purchases of securities by the Fund or 

the Actively-Managed Fund, as the case 

may be, in an Affiliated Underwriting, 

once an investment by a Fund of Funds 

in the securities of the Fund or the 

Actively-Managed Fund exceeds the 

limit of section 12(d)(1)(A)(i) of the Act, 

including any purchases made directly 

from an Underwriting Affiliate. The 

Board will review these purchases 

periodically, but no less frequently than 

annually, to determine whether the 

purchases were influenced by the 

investment by the Fund of Funds in the 

Fund or the Actively-Managed Fund. 

The Board will consider, among other 

things: (i) Whether the purchases were 

consistent with the investment 

objectives and policies of the Fund or 

the Actively-Managed Fund, as the case 

may be; (ii) how the performance of 

securities purchased in an Affiliated 

Underwriting compares to the 

performance of comparable securities 

purchased during a comparable period 

of time in underwritings other than 

Affiliated Underwritings or to a 

benchmark such as a comparable market 

index; and (iii) whether the amount of 

securities purchased by the Fund or the 

Actively-Managed Fund, as the case 

may be, in Affiliated Underwritings and 

the amount purchased directly from an 

Underwriting Affiliate have changed 

significantly from prior years. The 

Board will take any appropriate actions 

based on its review, including, if 

appropriate, the institution of 

procedures designed to ensure that 

purchases of securities in Affiliated 

Underwritings are in the best interest of 

shareholders. 

10. Each Fund and each ActivelyManaged Fund will maintain and 

preserve permanently in an easily 

accessible place a written copy of the 

procedures described in the preceding 

condition, and any modifications to 

such procedures, and will maintain and 

preserve for a period of not less than six 

years from the end of the fiscal year in 

which any purchase in an Affiliated 

Underwriting occurred, the first two 

years in an easily accessible place, a 

written record of each purchase of 

securities in Affiliated Underwritings 

once an investment by a Fund of Funds 

in the securities of the Fund or the 

Actively-Managed Fund, as the case 

may be, exceeds the limit of section 

12(d)(1)(A)(i) of the Act, setting forth 

from whom the securities were 

acquired, the identity of the 

underwriting syndicate’s members, the 

terms of the purchase, and the 

information or materials upon which 

the Board’s determinations were made. 

11. Before approving any advisory 

contract under section 15 of the Act, the 

board of directors or trustees of each 

Investing Management Company 

including a majority of the noninterested directors or trustees, will find 

that the advisory fees charged under 

such contract are based on services 

provided that will be in addition to, 

rather than duplicative of, the services 

provided under the advisory contract(s) 

of any Fund or any Actively-Managed 

Fund in which the Investing 

Management Company may invest. 

These findings and their basis will be 

fully recorded in the minute books of 

the appropriate Investing Management 

Company. 

12. No Fund or Actively-Managed 

Fund will acquire securities of an 

investment company or company 

relying on section 3(c)(1) or 3(c)(7) of 

the Act in excess of the limits contained 

in section 12(d)(1)(A) of the Act, except 

to the extent permitted by exemptive 

relief from the Commission permitting 

the Fund or Actively-Managed Fund, as 

the case may be, to purchase shares of 

other investment companies for shortterm cash management purposes. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–9968 Filed 4–25–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–64311; File No. SR– 

NASDAQ–2011–052] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Eliminate 

the Expire Time 

April 20, 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 April 14, 

2011, The NASDAQ Stock Market LLC 

(‘‘NASDAQ’’ or the ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I, II, and III 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. 


srobinson on DSKHWCL6B1PROD with NOTICES
23350 Federal Register / Vol. 76, No. 80 / Tuesday, April 26, 2011 / Notices 

3 15 U.S.C. 78f(b). 

4 15 U.S.C. 78f(b)(5). 

5 15 U.S.C. 78s(b)(3)(A). 

6 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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of the Substance 

of the Proposed Rule Change 

NASDAQ is filing with the 

Commission a proposal for the 

NASDAQ Options Market (‘‘NOM’’) to 

amend Chapter VI, Trading Systems, 

Section 1, Definitions, and Section 6, 

Acceptance of Quotes and Orders, to 

eliminate the ‘‘Time in Force’’ 

designation called ‘‘Expire Time.’’ 

This change is scheduled to be 

implemented on NOM on or about 

August 1, 2011; the Exchange will 

announce the implementation schedule 

by Options Trader Alert, once the 

rollout schedule is finalized. 

The text of the proposed rule change 

is available at 

nasdaq.cchwallstreet.com, at 

NASDAQ’s principal office, 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, 

NASDAQ 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. 

NASDAQ 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 

The purpose of the proposed rule 

change is to eliminate the Expire Time. 

Currently, Chapter VI, Section 1(g) 

provides that the term ‘‘Time in Force’’ 

means the period of time that the 

System will hold an order for potential 

execution. Time in force conditions, 

which are listed in subsections 1(g)(1)— 

(5), include Expire Time, Immediate or 

Cancel, Good-till-Cancelled and WAIT. 

At this time, ‘‘Expire Time’’ (or ‘‘EXPR’’) 

is being eliminated. Expire Time means 

that, for orders so designated, that if 

after entry into the System, the order is 

not fully executed, the order (or the 

unexecuted portion thereof) shall 

remain available for potential display 

and/or execution for the amount of time 

specified by the entering Participant 

unless canceled by the entering party. 

EXPR Orders are currently available for 

entry from the time prior to market open 

specified by the Exchange on its Web 

site until market close Eastern Time and 

for execution from 9:30 a.m. until 

market close. Chapter VI, Section 6, 

Acceptance of Quotes and Orders, also 

currently refers to Expire Time in 

subsection (a)(1), which is also 

proposed to be amended to eliminate 

the reference to Expire Time. 

The Exchange proposes to eliminate 

Expire Time, as part of some 

technological changes to NOM’s trading 

system intended to enhance the system 

as a whole. The Exchange has 

determined not to incorporate this 

functionality into its enhanced trading 

system, because the same result can be 

achieved by Participants cancelling 

their orders directly. Also, the Exchange 

believes that this proposed rule change 

as well as other notification to 

Participants will serve to notify 

Participants of this change. The other 

Time in Force conditions will continue 

to be available. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act 3 in general, and furthers the 

objectives of Section 6(b)(5) of the Act 4

in particular, in that 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 facilitating 

transactions in securities, and to remove 

impediments to and perfect the 

mechanisms of a free and open market 

and a national market system, and, in 

general, to protect investors and the 

public interest. The Exchange believes 

that the proposal is appropriate and 

reasonable, because, although it 

eliminates a time in force condition, this 

functionality is not required under the 

Act; the Exchange has determined to 

eliminate it and believes that this 

should have no detrimental effect, 

because it is not widely used. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

NASDAQ does not believe that the 

proposed rule change will result in any 

burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act, as amended. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments were neither 

solicited nor 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 Section 

19(b)(3)(A) of the Act 5 and Rule 19b– 

4(f)(6) 6 thereunder. 

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–NASDAQ–2011–052 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–NASDAQ–2011–052. 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 


srobinson on DSKHWCL6B1PROD with NOTICES
Federal Register / Vol. 76, No. 80 / Tuesday, April 26, 2011 / Notices 23351 

7 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Chapter I, Section 1(a)(33). 

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

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 offices 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–NASDAQ–2011–052 and 

should be submitted on or before May 

17, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.7

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–9970 Filed 4–25–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–64312; File No. SR– 

NASDAQ–2011–053] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Adopt an 

Order Price Protection Feature 

April 20, 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 April 14, 

2011, The NASDAQ Stock Market LLC 

(‘‘NASDAQ’’ or the ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I, II, and III 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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of the Substance 

of the Proposed Rule Change 

NASDAQ is filing with the 

Commission a proposal for the 

NASDAQ Options Market (‘‘NOM’’) to 

amend Chapter VI, Trading Systems, to 

adopt new Section 18, Order Price 

Protection. 

This change is scheduled to be 

implemented on NOM on or about 

August 1, 2011; the Exchange will 

announce the implementation schedule 

by Options Trader Alert, once the 

rollout schedule is finalized. 

The text of the proposed rule change 

is available at 

nasdaq.cchwallstreet.com, at 

NASDAQ’s principal office, 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, 

NASDAQ 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. 

NASDAQ 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 

The purpose of the proposed rule 

change is to address risks to market 

participants of human error in entering 

orders at unintended prices. To that 

end, the Exchange has developed a 

program known as Order Price 

Protection (‘‘OPP’’), which would 

prevent certain orders from executing or 

being placed on the book at prices 

outside pre-set standard limits. The 

System would reject such orders rather 

than executing them automatically. The 

operation of the OPP, which is very 

similar to PHLX Rule 1080.07, would be 

set forth in new Section 18 of Chapter 

VI. 

The OPP feature would prevent 

certain day limit, good til cancelled or 

immediate or cancel orders at prices 

outside of certain pre-set limits from 

being accepted by the System. OPP 

would apply to all options, but would 

not apply to market orders or 

Intermarket Sweep Orders. OPP would 

be operational each trading day after the 

opening until the close of trading, 

except during trading halts. The 

Exchange would also be able to 

temporarily deactivate OPP from time to 

time on an intraday basis at its 

discretion if it determined that volatility 

warranted deactivation. Participants 

would be notified of intraday OPP 

deactivation due to volatility and any 

subsequent intraday reactivation by the 

Exchange through the issuance of 

system status messages. 

The OPP will help Participants 

control risk by checking each order, 

before it is accepted into the System, 

against certain parameters established 

by new Chapter VI, Section 18. It would 

compare price instructions on the order 

against the current contraside National 

Best Bid Offer (‘‘NBBO’’),3 and would 

automatically reject the order if it is 

priced outside the range established in 

Section 18. 

The range of permissible orders 

depends on whether the contra-side of 

an incoming order is greater than $1.00, 

or equal to or less than $1.00. If the 

NBBO on the contra-side of an incoming 

order were greater than $1.00, orders 

with a limit more than 50% through 

such contra-side NBBO would be 

rejected by the System upon receipt. For 

example, if the NBBO on the offer side 

were $1.10, an order to buy options for 

more than $1.65 would be rejected. 

Similarly, if the NBBO on the bid side 

were $1.10, an order to sell options for 

less than $0.55 would be rejected. 

If the NBBO on the contra-side of an 

incoming order were less than or equal 

to $1.00, orders with a limit more than 

100% through such contra-side NBBO 

would be rejected by the System upon 

receipt. For example, if the NBBO on 

the offer side were $1.00, an order to 

buy options for more than $2.00 would 

be rejected. However, if the NBBO of the 

bid side of an incoming order to sell 

were less than or equal to $1.00, the 

OPP limits set forth above would result 

in all incoming sell orders being 

accepted regardless of their limit. 

Like the PHLX’s OPP, NOM’s will be 

available for Participants’ orders, but 

not for market making. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act 4 in general, and furthers the 


srobinson on DSKHWCL6B1PROD with NOTICES