76062 Federal Register / Vol. 75, No. 234 / Tuesday, December 7, 2010 / Notices 

12 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 established in January 2007 

and in October 2009 was expanded and extended 

through December 31, 2010. See Securities 

Exchange Act Release Nos. 55153 (January 23, 

2007), 72 FR 4553 (January 31, 2007)(SR–Phlx– 

2006–74)(notice of filing and approval order 

establishing Penny Pilot); 60873 (October 23, 2009), 

74 FR 56675 (November 2, 2009)(SR–Phlx–2009– 

91)(notice of filing and immediate effectiveness 

expanding and extending Penny Pilot); 60966 

(November 9, 2009), 74 FR 59331 (November 17, 

2009)(SR–Phlx–2009–94)(notice of filing and 

immediate effectiveness adding seventy-five classes 

to Penny Pilot); 61454 (February 1, 2010), 75 FR 

6233 (February 8, 2010)(SR–Phlx–2010–12)(notice 

of filing and immediate effectiveness adding 

seventy-five classes to Penny Pilot); 62028 (May 4, 

2010), 75 FR 25890 (May 10, 2010)(SR–Phlx–2010– 

65)(notice of filing and immediate effectiveness 

adding seventy-five classes to Penny Pilot); and 

62616 (July 30, 2010), 75 FR 47664 (August 6, 

2010)(SR–Phlx–2010–103)(notice of filing and 

immediate effectiveness adding seventy-five classes 

to Penny Pilot). 

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 

up to 90 days (i) as the Commission may 

designate 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 proposal 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 

No. SR–BATS–2010–034 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 

No. SR–BATS–2010–034. 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 changes 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 

will also 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 No. SR–BATS– 

2010–034 and should be submitted on 

or before December 28, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–30577 Filed 12–6–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63395; File No. SR–Phlx2010–167] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to 

Extension of the Exchange’s Penny 

Pilot Program and Replacement, on a 

Semi-Annual Basis, of Penny Pilot 

Issues that Have Been Delisted 

November 30, 2010. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on November 

22, 2010, NASDAQ OMX PHLX LLC 

(‘‘Phlx’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘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 

The Exchange is filing with the 

Commission a proposal to amend Phlx 

Rule 1034 (Minimum Increments) to: 

Extend through December 31, 2011, the 

Penny Pilot Program in options classes 

in certain issues (‘‘Penny Pilot’’ or 

‘‘Pilot’’); and replace, on a semi-annual 

basis, any Penny Pilot issues that have 

been delisted.3

The text of the proposed rule change 

is available on the Exchange’s Website 

at http:// 

nasdaqomxphlx.cchwallstreet.com/ 

NASDAQOMXPHLX/Filings/, 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 this filing is to amend 

Phlx Rule 1034 to: (1) Extend through 

December 31, 2011, the Penny Pilot; and 

(2) replace, on a semi-annual basis, any 

Penny Pilot issues that have been 

delisted. 

For a pilot period scheduled to expire 

on December 31, 2010, the Penny Pilot 

allows certain options to be quoted and 

traded on the Exchange in minimum 

increments of $0.01 for all series in such 

options with a price of less than $3.00; 

and in minimum increments of $0.05 for 

all series in such options with a price 

of $3.00 or higher. Options overlying the 

PowerShares QQQ Trust (‘‘QQQQ’’),® 

SPDR S&P 500 Exchange Traded Funds 

(‘‘SPY’’), and iShares Russell 2000 Index 

Funds (‘‘IWM’’), however, are quoted 


emcdonald on DSK2BSOYB1PROD with NOTICES
Federal Register / Vol. 75, No. 234 / Tuesday, December 7, 2010 / Notices 76063 

4The replacement issues will be announced to 

the Exchange’s membership via an OTA posted on 

the Exchange’s web site. 

5See supra note 3. 

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

7 15 U.S.C. 78f(b)(5). 

8 15 U.S.C. 78s(b)(3)(A). 

9 17 CFR 240.19b–4(f)(6)(iii). 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. 

and traded in minimum increments of 

$0.01 for all series regardless of the 

price. Currently the Exchange trades 361 

options classes pursuant to the Penny 

Pilot. 

The Penny Pilot is a very successful 

and efficacious pricing program that is 

beneficial to traders, investors, and 

public customers, and the Exchange has 

received numerous requests to expand 

and continue it. This proposal allows 

the Penny Pilot to continue in its 

current format for one year through 

December 31, 2011. 

Commensurate with the extension of 

the Penny Pilot through 2011, the 

Exchange proposes to extend through 

2011 the ability to replace on a semiannual basis any Penny Pilot issues that 

have been delisted with the next most 

actively traded multiply listed options 

classes that are not yet included in the 

Pilot, based on trading activity in the 

previous six months. The replacement 

issues would be added to the Pilot on 

the second trading day following 

January 1, 2011, and July 1, 2011.4 The 

replacement issues will be selected 

based on trading activity for the six 

month period beginning June 1, 2010 

and ending November 30, 2010, for the 

January 2011 replacement, and the six 

month period beginning December 1, 

2010 and ending May 31, 2011 for the 

July 2011 replacements.5

In conjunction with this extension 

proposal, the Exchange agrees to submit 

a report to the Commission regarding 

the Penny Pilot that will include: (1) 

Data and analysis on the number of 

quotations generated for options 

included in the report; (2) an assessment 

of the quotation spreads for the options 

included in the report; (3) an assessment 

of the impact of the Pilot Program on the 

capacity of Phlx’s automated systems; 

(4) data reflecting the size and depth of 

markets; and (5) any capacity problems 

or other problems that arose related to 

the operation of the Pilot Program and 

how the Exchange addressed them. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act 6 in general, and furthers the 

objectives of Section 6(b)(5) of the Act 7

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, by 

extending the Penny Pilot. 

The Exchange notes that the Penny 

Pilot is a very successful and efficacious 

pricing program that is beneficial to 

traders, investors, and public customers, 

and the Exchange has received 

numerous requests to expand and 

continue it. This proposal allows the 

Penny Pilot to continue in its current 

format for one year through December 

31, 2011. 

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 Exchange believes that the 

foregoing proposed rule change may 

take effect upon filing with the 

Commission pursuant to Section 

19(b)(3)(A) 8 of the Act and Rule 19b– 

4(f)(6)(iii) thereunder 9 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 from the date on 

which it was filed, or such shorter time 

as the Commission may designate. 

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: (i) Necessary or appropriate in 

the public interest; (ii) for the protection 

of investors; or (iii) 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–Phlx-2010–167 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-2010–167. 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 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 No. SR–Phlx-2010– 

167 and should be submitted on or 

before December 28, 2010. 


emcdonald on DSK2BSOYB1PROD with NOTICES
76064 Federal Register / Vol. 75, No. 234 / Tuesday, December 7, 2010 / Notices 

10 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 established in March 2008 

and in October 2009 was expanded and extended 

through December 31, 2010. See Securities 

Exchange Act Release Nos. 57579 (March 28, 2008), 

73 FR 18587 (April 4, 2008) (SR–NASDAQ–2008– 

026) (notice of filing and immediate effectiveness 

establishing Penny Pilot); 60874 (October 23, 2009), 

74 FR 56682 (November 2, 2009) (SR–NASDAQ– 

2009–091) (notice of filing and immediate 

effectiveness expanding and extending Penny 

Pilot); 60965 (November 9, 2009), 74 FR 59292 

(November 17, 2009) (SR–NASDAQ–2009–097) 

(notice of filing and immediate effectiveness adding 

seventy-five classes to Penny Pilot); 61455 

(February 1, 2010), 75 FR 6239 (February 8, 2010) 

(SR–NASDAQ–2010–013) (notice of filing and 

immediate effectiveness adding seventy-five classes 

to Penny Pilot); 62029 (May 4, 2010), 75 FR 25895 

(May 10, 2010) (SR–NASDAQ–2010–053) (notice of 

filing and immediate effectiveness adding seventyfive classes to Penny Pilot); and 62617 (July 30, 

2010), 75 FR 47670 (August 6, 2010) (SR– 

NASDAQ–2010–092) (notice of filing and 

immediate effectiveness adding seventy-five classes 

to Penny Pilot). 

4The replacement issues will be announced to 

the Exchange’s membership via an OTA posted on 

the Exchange’s Web site. 

5See supra note 3. 

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

7 15 U.S.C. 78f(b)(5). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–30580 Filed 12–6–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63396; File No. SR– 

NASDAQ–2010–150] 

Self-Regulatory Organizations; the 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to 

Extension of the Exchange’s Penny 

Pilot Program and Replacement, on a 

Semi-Annual Basis, of Penny Pilot 

Issues That Have Been Delisted 

November 30, 2010. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on November 

22, 2010, The NASDAQ Stock Market 

LLC (‘‘Nasdaq’’) filed with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’) the proposed rule 

change as described in Items I, II and III 

below, which Items have been prepared 

by Nasdaq. 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 Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’) a proposal for the 

NASDAQ Options Market (‘‘NOM’’ or 

‘‘Exchange’’) to amend Chapter VI, 

Section 5 (Minimum Increments) to: 

Extend through December 31, 2011, the 

Penny Pilot Program in options classes 

in certain issues (‘‘Penny Pilot’’ or 

‘‘Pilot’’); and replace, on a semi-annual 

basis, any Penny Pilot issues that have 

been delisted.3

The text of the proposed rule change 

is available from Nasdaq’s Web site at 

http://nasdaq.cchwallstreet.com/ 

Filings/, 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 this filing is to amend 

Chapter VI, Section 5 to: (1) Extend 

through December 31, 2011, the Penny 

Pilot; and (2) Replace, on a semi-annual 

basis, any Penny Pilot issues that have 

been delisted. 

For a pilot period scheduled to expire 

on December 31, 2010, the Penny Pilot 

allows certain options to be quoted and 

traded on the Exchange in minimum 

increments of $0.01 for all series in such 

options with a price of less than $3.00; 

and in minimum increments of $0.05 for 

all series in such options with a price 

of $3.00 or higher. Options overlying the 

PowerShares QQQ Trust (‘‘QQQQ’’)®, 

SPDR S&P 500 Exchange Traded Funds 

(‘‘SPY’’), and iShares Russell 2000 Index 

Funds (‘‘IWM’’), however, are quoted 

and traded in minimum increments of 

$0.01 for all series regardless of the 

price. Currently the Exchange trades 361 

options classes pursuant to the Penny 

Pilot. 

The Penny Pilot is a very successful 

and efficacious pricing program that is 

beneficial to traders, investors, and 

public customers, and the Exchange has 

received numerous requests to expand 

and continue it. This proposal allows 

the Penny Pilot to continue in its 

current format for one year through 

December 31, 2011. 

Commensurate with the extension of 

the Penny Pilot through 2011, the 

Exchange proposes to extend through 

2011 the ability to replace on a semiannual basis any Penny Pilot issues that 

have been delisted with the next most 

actively traded multiply listed options 

classes that are not yet included in the 

Pilot, based on trading activity in the 

previous six months. The replacement 

issues would be added to the Pilot on 

the second trading day following 

January 1, 2011, and July 1, 2011.4 The 

replacement issues will be selected 

based on trading activity for the six 

month period beginning June 1, 2010 

and ending November 30, 2010, for the 

January 2011 replacement, and the six 

month period beginning December 1, 

2010 and ending May 31, 2011 for the 

July 2011 replacements.5

In conjunction with this extension 

proposal, the Exchange agrees to submit 

a report to the Commission regarding 

the Penny Pilot that will include: (1) 

Data and analysis on the number of 

quotations generated for options 

included in the report; (2) an assessment 

of the quotation spreads for the options 

included in the report; (3) an assessment 

of the impact of the Pilot Program on the 

capacity of NOM’s automated systems; 

(4) data reflecting the size and depth of 

markets; and (5) any capacity problems 

or other problems that arose related to 

the operation of the Pilot Program and 

how the Exchange addressed them. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act 6 in general, and furthers the 

objectives of Section 6(b)(5) of the Act 7

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, by 

extending the Penny Pilot. 

The Exchange notes that the Penny 

Pilot is a very successful and efficacious 

pricing program that is beneficial to 

traders, investors, and public customers, 

and the Exchange has received 

numerous requests to expand and 


emcdonald on DSK2BSOYB1PROD with NOTICES