6770 Federal Register / Vol. 75, No. 27 / Wednesday, February 10, 2010 / Notices 

7 If the associated person requests a different 

hearing location other than the location closest to 

where the associated person was employed at the 

time of the of the events giving rise to dispute and 

makes the request before the arbitrator or arbitrators 

are selected, the Director will grant the request. If 

the associated person requests a different hearing 

location other than the location closest to where the 

associated person was employed at the time of the 

of the events giving rise to dispute and makes the 

request after the arbitrator or arbitrators are 

selected, the associated person must submit the 

request to the arbitrator or panel. 

8 In its comment, PIABA also recommended that 

FINRA consider additional changes in a future rule 

filing. Those suggestions are outside the scope of 

the current proposed rule change. 

9 In approving the 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). 

10 15 U.S.C. 78o–3(b)(6). 

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

12 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 17 CFR 240.19b–4(f)(6). 

4An SQT is an Exchange Registered Options 

Trader (‘‘ROT’’) who has received permission from 

the Exchange to generate and submit option 

quotations electronically through an electronic 

interface with AUTOM via an Exchange approved 

proprietary electronic quoting device in eligible 

options to which such SQT is assigned. See 

Exchange Rule 1014(b)(ii)(A). 

5An RSQT is an ROT that is a member or member 

organization with no physical trading floor 

presence who has received permission from the 

Exchange to generate and submit option quotations 

electronically through AUTOM in eligible options 

to which such RSQT has been assigned. An RSQT 

may only submit such quotations electronically 

from off the floor of the Exchange. See Exchange 

Rule 1014(b)(ii)(B). 

of the events giving rise to the dispute. 

FINRA notes that this amendment 

clarifies current practice and makes the 

rule language under the Industry Code 

consistent with the comparable rule 

under the Customer Code. The second 

change to Rule 13213(a) would allow an 

associated person to request a different 

hearing location, other than the closest 

hearing location. Specifically, the 

proposal would state that the Director 

will select the hearing location closest 

to where the associated person was 

employed at the time of the events 

giving rise to the dispute, unless the 

hearing location closest to the 

associated person’s employment is in a 

different state. In that case, the 

associated person may request a hearing 

location in his or her state of 

employment at the time of the events 

giving rise to the dispute. 

Under the proposal, the Director 

would continue to select the hearing 

location closest to where the associated 

person was employed at the time of the 

events giving rise to the dispute. 

However, the Director would honor an 

associated person’s request for a 

different hearing location in the 

associated person’s state of 

employment.7 FINRA believes the 

proposal would benefit associated 

persons by providing them with a 

choice of hearing locations. 

Three commenters addressed the 

proposed rule change and all three 

urged the Commission to approve it.8

III. Discussion and Commission 

Findings 

The Commission finds the proposed 

rule change to be consistent with the 

requirements of the Act and the rules 

and regulations thereunder applicable to 

a national securities association.9 In 

particular, the Commission finds that 

the proposed rule change is consistent 

with the provisions of Section 15A(b)(6) 

of the Act,10 which requires, among 

other things, that FINRA rules must be 

designed to prevent fraudulent and 

manipulative acts and practices, to 

promote just and equitable principles of 

trade, and, in general, to protect 

investors and the public interest. The 

Commission believes that the proposed 

rule change is consistent with FINRA’s 

statutory obligations under the Act to 

protect investors and the public interest 

because the proposal would assist in the 

efficient administration of the 

arbitration process by further clarifying 

the procedures of selecting hearing 

locations. 

IV. Conclusion 

It is therefore ordered, pursuant to 

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

proposed rule change (SR–FINRA– 

2009–073) be, and hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–2867 Filed 2–9–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–61492; File No. SR–Phlx– 

2010–10] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by NASDAQ 

OMX PHLX, Inc. Relating to the 

Exchange’s Quote Lock Counting 

Period 

February 4, 2010. 

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 January 

29, 2010, NASDAQ OMX PHLX, Inc. 

(‘‘Phlx’’ 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. Phlx has 

designated the proposed rule change as 

constituting a rule change under Rule 

19b–4(f)(6) under the Act,3 which 

renders the proposal effective upon 

filing with the Commission. 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 

Commentaries .02 and .03 to Exchange 

Rule 1082, Firm Quotations, to modify 

the duration of the ‘‘counting period’’ 

that is initiated when electronically 

submitted quotations of specialists, 

Streaming Quote Traders (‘‘SQTs’’),4 and 

Remote Streaming Quote Traders 

(‘‘RSQTs’’) 5 interact with one another 

and result in a locked market (e.g., $1.00 

bid—1.00 offer) or crossed market (e.g., 

$1.10 bid—1.00 offer). The Exchange 

also proposes technical amendments as 

described 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 

The purpose of the proposed rule 

change is to give the Exchange the 

ability to improve the speed with which 

the Exchange’s systems can 

automatically execute locked or crossed 

quotations against one another. 


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6See Securities Exchange Act Release No. 50100 

(July 27, 2004), 69 FR 46612 (August 3, 2004) (SR– 

Phlx–2003–59). 

7See Securities Exchange Act Release No. 55375 

(February 28, 2007), 72 FR 10288 (March 7, 2007) 

(SR–Phlx–2006–31). 

8The counting period would not exceed the 

current @ of one second. 

9See Securities Exchange Act Release No. 59995 

(May 28, 2009), 74 FR 26750 (June 3, 2009) (SR– 

Phlx–2009–32). 

10 15 U.S.C. 78f(b). 

11 15 U.S.C. 78f(b)(5). 

12 15 U.S.C. 78s(b)(3)(A). 

13 17 CFR 240.19b–4(f)(6). 

14As required under Rule 19b–4(f)(6)(iii), the 

Exchange has provided the Commission with 

written notice of its intent to file the proposed rule 

change at least five business days prior to the filing 

date of this proposal. 

15See Chicago Board Options Exchange Inc. 

(‘‘CBOE’’) Rule 6.45A(d)(i)(B). 

When the Exchange deployed its 

initial electronic options trading 

platform, Phlx XL,6 the Commission 

approved an Exchange proposal to 

establish a one-second ‘‘counting 

period,’’ to begin when electronic 

quotations submitted by specialists and/ 

or SQTs became locked, during which 

the SQT(s) and/or specialist whose 

quotations are locked could eliminate 

the locked market. If their markets 

became crossed, the Exchange would 

disseminate a locked market at the price 

of the quotation that was crossed and 

would initiate the one-second counting 

period. Subsequently, the Exchange 

reduced the one-second counting period 

to 1⁄4 of one second.7 Any unresolved 

locked or crossed markets remaining 

after the counting period are 

automatically executed. 

The Exchange proposes to modify the 

duration of the counting period in order 

to provide more flexibility in increasing 

the speed with which locked and 

crossed markets may be resolved on the 

Exchange. Specifically, proposed 

Commentary .02 to Rule 1082 would 

state that the duration of the counting 

period will be established by the 

Exchange, will be the same for all 

options traded on the Exchange, and 

will not exceed .25 of one second. The 

duration of the counting period and any 

changes thereto will be published in an 

Options Trader Alert, which will be 

available on the Exchange’s Web site. 

The effect of the proposed rule change 

would be to give the Exchange the 

ability to reduce the counting period 

from the current 1⁄4 of one second 8 to 

a lesser time period, during which 

market participants may resolve locked 

and crossed markets, and after which, if 

the locked/crossed condition is not 

resolved, the Exchange’s system will 

eliminate the condition by executing the 

transaction. The Exchange believes that 

any reduced counting period should 

improve market efficiency by 

eliminating locked and crossed markets 

in a more timely fashion, and should, in 

turn, facilitate compliance with firm 

quote obligations. 

Technical Amendments 

At the time the rule was originally 

adopted, the Exchange distinguished 

between ‘‘Streaming Quote Options’’ 

which are traded on the Exchange’s 

automated options trading platform, 

Phlx XL (since modified and re-named 

Phlx XL II 9), and ‘‘Non-Streaming Quote 

Options.’’ All options traded on the 

Exchange are currently traded on Phlx 

XL II. Thus, the distinction is no longer 

necessary, and accordingly the 

Exchange proposes to delete references 

to ‘‘Streaming Quote Options’’ from the 

rule. 

The Exchange proposes to modernize 

the rule by eliminating anachronistic 

references to the ‘‘ 1⁄4 of one second’’ 

counting period, and instead 

acknowledge the world of 

decimalization by referring to a 

counting period ‘‘not to exceed .25 of 

one second.’’ 

The Exchange further proposes to 

delete quotations surrounding the term 

‘‘counting period’’ in all references 

thereto following its initial definition in 

the rule. The rule will simply refer to 

the counting period. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act 10 in general, and furthers the 

objectives of Section 6(b)(5) of the Act 11

in particular, in that it is 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. 

Specifically, the Exchange believes that 

the proposal benefits customers by 

improving market efficiency by enabling 

the Exchange’s system to eliminate 

locked and crossed markets in a more 

timely fashion. 

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 

The proposed rule change is 

designated by the Exchange as a ‘‘noncontroversial’’ rule pursuant to Section 

19(b)(3)(A) 12 of the Act and 

subparagraph (f)(6) of Rule 19b–4 

thereunder,13 because the proposed rule 

change: (1) Does not significantly affect 

the protection of investors or the public 

interest; (2) does 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 if consistent 

with the protection of investors and the 

public interest, provided that the 

Exchange has given the Commission 

written notice of its intent to file the 

proposed rule change at least five 

business days prior to the filing of the 

proposed rule change.14 Specifically, 

the Exchange notes that a similar 

counting period has been established 

under the rules of another exchange.15

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission may summarily abrogate 

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. 

Consequently, the rule is being filed 

for immediate effectiveness. 

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–2010–10 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–2010–10. This file 

number should be included on the 


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16 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The Penny Pilot was extended and expanded on 

November 2, 2009, adding 75 classes to the Pilot on 

that date. See Exchange Act Release No. 61106 

(December 3, 2009) 74 FR–65193 (December 9, 

2009). 

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

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

6 15 U.S.C. 78s(b)(3)(A). 

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, 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–2010–10 and should 

be submitted on or before March 3, 

2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–2866 Filed 2–9–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–61479; File No. SR– 

NYSEAmex–2010–08] 

Self-Regulatory Organizations; NYSE 

Amex LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Amending Rule 960NY 

Trading Differentials 

February 3, 2010. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) 1 and Rule 19b–4 thereunder,2

notice is hereby given that on January 

29, 2010, NYSE Amex LLC (‘‘NYSE 

Amex’’ or the ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(the ‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the self-regulatory organization. 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 its 

option trading rules to designate SPY 

(SPDR S&P 500 ETF Trust) and IWM 

(iShares Russell 2000 Index Fund) as 

eligible to quote and trade all options 

contracts in one cent increments 

effective February 1, 2010. The text of 

the proposed rule change is attached as 

Exhibit 5 to the 19b–4 form. A copy of 

this filing is available on the Exchange’s 

Web site at http://www.nyse.com, at the 

Exchange’s principal office, at the 

Commission’s Public Reference Room, 

and on the Commission’s Web site at 

http://www.sec.gov. 

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 

self-regulatory organization 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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to designate 

two Penny Pilot Program 3 issues as 

eligible to quote and trade all options 

contracts in one cent increments, 

regardless of premium value. 

Specifically, the Exchange proposes to 

so designate SPY (SPDR S&P 500 ETF 

Trust) and IWM (iShares Russell 2000 

Index Fund). In selecting these issues, 

the Exchange considered, among other 

things, that these symbols are (a) among 

the most actively traded issues 

nationally, with a wide array of investor 

interest, (b) have more series trading at 

a premium between $3 and $10, and (c) 

are trading at prices that are neither 

extremely low nor high, but are 

generally trading between $15—$50. 

Furthermore, the Exchange proposes 

to designate SPY and IWM as eligible to 

quote and trade all options contracts in 

one cent increments as of February 1, 

2010. This date corresponds with the 

second phase-in date for additional 

classes in the pilot. The Exchange 

believes that issues that meet these 

criteria benefit the most from the ability 

to quote and trade all options in penny 

increments. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with Section 

6(b) 4 of the Securities Exchange Act of 

1934 (the ‘‘Act’’), in general, and furthers 

the objectives of Section 6(b)(5) 5 in 

particular in that it 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, by allowing all SPY and IWM 

option series to quote in penny 

intervals. 

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 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 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

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 prior to 30 days from the date 

on which it was filed, or such shorter 

time as the Commission may designate 

if consistent with the protection of 

investors and the public interest, the 

proposed rule change has become 

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

of the Act 6 and Rule 19b–4(f)(6)(iii) 

thereunder. 

A proposed rule change filed under 

Rule 19b–4(f)(6) normally does not 


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