Federal Register / Vol. 75, No. 235 / Wednesday, December 8, 2010 / Notices 76503 

8As required under Rule 19b–4(f)(6)(iii), NSX 

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. 

9 17 CFR 19b–4(f)(6)(iii). 

10 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

Commission written notice of its intent 

to file the proposed rule change at least 

five business days prior to the filing 

date of the proposed rule change.8

Pursuant to Rule 19b–4(f)(6)(iii) under 

the Act,9 the Commission may designate 

a shorter time period if such action is 

consistent with the protection of 

investors and the public interest. At any 

time within sixty (60) days of the filing 

of such 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. 

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 

No. SR–NSX–2010–15 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–NSX–2010–15. 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. Copies of such filing 

also will be available for inspection and 

copying at the principal office of the 

NSX. 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–NSX–2010–15 and should 

be submitted by December 29, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–30829 Filed 12–7–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63416; File No. SR–BX– 

2010–083] 

Self-Regulatory Organizations; 

NASDAQ OMX BX, Inc.; Notice of Filing 

of Proposed Rule Change Relating to 

The Price Improvement Period To 

Permit an Initiating Participant To 

Designate a PIP Surrender Quantity 

December 2, 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 November 

24, 2010, NASDAQ OMX BX, Inc. (the 

‘‘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 self-regulatory organization. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of the Substance 

of the Proposed Rule Change 

The Exchange proposes to amend 

Chapter V, Section 18 (The Price 

Improvement Period (‘‘PIP’’)) of the 

Rules of the Boston Options Exchange 

Group, LLC (‘‘BOX’’) to permit an 

Options Participant initiating a PIP to 

designate a PIP Surrender Quantity. The 

text of the proposed rule change is 

available from the principal office of the 

Exchange, on the Exchange’s Web site at 

http://nasdaqomxbx.cchwallstreet.com/

NASDAQOMXBX/Filings/, 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 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The proposed rule change will amend 

Chapter V, Section 18 (The Price 

Improvement Period (‘‘PIP’’)) of the BOX 

Rules to permit an Options Participant 

initiating a PIP (‘‘Initiating Participant’’), 

at its option, to designate a lower 

amount for which it will retain certain 

priority and trade allocation privileges 

upon the conclusion of the PIP auction 

than the forty percent (40%) of the PIP 

Order to which the Initiating Participant 

is entitled as set forth in Chapter V, 

Sections 18(f)(i) and (f)(ii) of the BOX 

Rules. In certain instances, Chapter V, 

Sections 18(f)(i) and (f)(ii) of the BOX 

Rules allow an Initiating Participant to 

retain priority and trade allocation 

privileges for 40% of the size of a PIP 

Order upon conclusion of the PIP. This 

proposal will permit an Initiating 

Participant, when starting a PIP, to 

submit the Primary Improvement Order 

to BOX with a designation to identify 

the total size of the PIP Order that the 

Initiating Participant is willing to 

‘‘surrender’’ to other PIP Participants 

(‘‘PIP Surrender Quantity’’), resulting in 

the Initiating Participant potentially 

being allocated less than the forty 

percent (40%) to which it may be 

entitled. For example, when an 

Initiating Participant submits a PIP 

Order and a Primary Improvement 

Order for 100 contracts and a PIP 

Surrender Quantity of 70 contracts, the 

Initiating Participant is designating that 

it is willing to surrender seventy percent 

(70%) of the PIP Order to other PIP 

Participants. Therefore, the Initiating 

Participant is only retaining priority to 

thirty percent (30%) of the PIP Order, 


jlentini on DSKJ8SOYB1PROD with NOTICES
76504 Federal Register / Vol. 75, No. 235 / Wednesday, December 8, 2010 / Notices 

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

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

rather than the forty percent (40%) it 

could have received. The Primary 

Improvement Order shall yield priority 

to certain competing orders in the 

circumstances set forth in Chapter V, 

Section 18(f)(iii) of the BOX Rules. 

The proposed rule change will further 

provide that in no case shall the 

Initiating Participant’s use of the 

Surrender Quantity function result in an 

allocation to the Initiating Participant 

that would be greater than the 

maximum allowable allocation the 

Initiating Participant would otherwise 

receive in accordance with the PIP 

allocation procedures set forth in 

Chapter V, Section 18(f) of the BOX 

Rules. The proposal specifies that the 

PIP Surrender Quantity shall not be 

effective for an amount that is lesser 

than or equal to sixty percent (60%) of 

the size of the PIP Order. In such a case, 

the forty percent (40%) maximum 

allowable priority allocation to the 

Initiating Participant would apply. 

Additionally, the proposed rule 

change will modify the BOX Trading 

Host’s trade allocation at the conclusion 

of the PIP to account for the PIP 

Surrender Quantity. The proposal 

specifies that when the BOX Trading 

Host determines the priority and trade 

allocation amounts for the Initiating 

Participant upon the conclusion of the 

PIP auction, the Trading Host will 

automatically adjust the trade 

allocations to the other PIP Participants 

according to the priority set forth in 

Chapter V, Section 18(e) of the BOX 

Rules, providing a total amount to the 

other PIP Participants up to the PIP 

Surrender Quantity. The Primary 

Improvement Order shall be allocated 

the remaining size of the PIP Order, if 

any. If the aggregate size of other PIP 

Participants’ contra orders is not equal 

to or greater than the PIP Surrender 

Quantity, then the remaining PIP 

Surrender Quantity shall be left unfilled 

and the Primary Improvement Order 

shall be allocated the remaining size of 

the PIP Order as set forth in Chapter V, 

Section 18(f) of the BOX Rules. For 

example, an Initiating Participant 

submits a PIP Order and a Primary 

Improvement Order for 100 contracts 

and a PIP Surrender Quantity of 70 

contracts. During the PIP auction only 

one Improvement Order for 25 contracts 

is received. Even though the Initiating 

Participant was willing to surrender 70 

contracts to the other PIP Participants, 

there is not enough competing size in 

this instance to allocate 70 contracts to 

someone else. Therefore, the Primary 

Improvement Order’s requirement to 

completely fill the PIP Order takes 

precedence, and the Initiating 

Participant is allocated the remaining 75 

contracts. 

BOX will provide Options 

Participants with three (3) business days 

notice, via Information Circular, about 

the implementation date of the PIP 

Surrender Quantity prior to its 

implementation in the BOX trading 

system. 

2. Statutory Basis 

The Exchange believes that the 

proposal is consistent with the 

requirements of Section 6(b) of the Act,3

in general, and Section 6(b)(5) of the 

Act,4 in particular. Specifically, the 

Exchange believes the proposed rule 

change is designed to prevent 

fraudulent and manipulative acts and 

practices, to promote just and equitable 

principles of trade, to remove 

impediments to and perfect the 

mechanism for a free and open market 

and a national market system and, in 

general, to protect investors and the 

public interest. In particular, the 

Exchange believes that the proposed 

rule change will benefit investors and 

Options Participants by allowing an 

Initiating Participant the flexibility to 

designate a lower amount for which it 

will retain certain priority and trade 

allocation privileges upon the 

conclusion of the PIP auction than the 

forty percent (40%) of the PIP Order to 

which the Initiating Participant is 

entitled, while providing other PIP 

Participants increased trade allocations. 

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 Regarding the 

Proposed Rule Change Received From 

Members, Participants or Others 

The Exchange has neither solicited 

nor received comments on the proposed 

rule change. 

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 

the 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–BX–2010–083 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–2010–083. 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 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 

publicly available. All submissions 

should refer to File Number SR–BX– 


jlentini on DSKJ8SOYB1PROD with NOTICES
Federal Register / Vol. 75, No. 235 / Wednesday, December 8, 2010 / Notices 76505 

5 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3For a detailed description of the Investor 

Support Program, see Securities Exchange Act 

Release No. 63270 (November 8, 2010), 75 FR 69489 

(November 12, 2010) (NASDAQ–2010–141) (notice 

of filing and immediate effectiveness) (the ‘‘ISP 

Filing’’). 

4The Commission has recently expressed its 

concern that a significant percentage of the orders 

of individual investors are executed at over the 

counter (‘‘OTC’’) markets, that is, at off-exchange 

markets; and that a significant percentage of the 

orders of institutional investors are executed in 

dark pools. Securities Exchange Act Release No. 

61358 (January 14, 2010), 75 FR 3594 (January 21, 

2010) (Concept Release on Equity Market Structure, 

‘‘Concept Release’’). See also Mary L. Schapiro, 

Strengthening Our Equity Market Structure (Speech 

at the Economic Club of New York, Sept. 7, 2010) 

(‘‘Schapiro Speech,’’ available on the Commission 

Web site) (comments of Commission Chairman on 

what she viewed as a troubling trend of reduced 

participation in the equity markets by individual 

investors, and that nearly 30 percent of volume in 

U.S.-listed equities is executed in venues that do 

not display their liquidity or make it generally 

available to the public). 

5NASDAQ notes that exclusion of partial trading 

days would be consistent with how the Exchange 

treats partial trading days for tabulation of pricing 

tiers under Rule 7018(j). 

6The term ‘‘ISP Execution Ratio’’ is defined as: 

The ratio of (i) the total number of liquidityproviding orders entered by a member through its 

ISP-designated ports during the specified time 

period to (ii) the number of liquidity-providing 

orders entered by such member through its ISPdesignated ports and executed (in full or partially) 

in the NASDAQ Market Center during such time 

period (provided that: (i) No order shall be counted 

as executed more than once; (ii) no Pegged Orders, 

odd-lot orders, or MIOC or SIOC orders shall be 

included in the tabulation; and (iii) no order shall 

be included in the tabulation if it executes but does 

not add liquidity). Rule 7014 (d)(3). 

7A partial trading day may occur, as an example, 

immediately after the Thanksgiving holiday. 

8There have been no partial trading days in the 

month of November previous to the date of 

submission of the filing and it would therefore not 

be retroactive in effect. 

2010–083 and should be submitted on 

or before December 29, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.5

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–30804 Filed 12–7–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63414; File No. SR– 

NASDAQ–2010–153] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of a Proposed Rule Change by The 

NASDAQ Stock Market LLC To Clarify 

the Exclusion of Partial Trading Days 

From Certain Calculations Within the 

Investor Support Program 

December 2, 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 November 

24, 2010, 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 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 

NASDAQ is filing with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’) a proposal for the 

NASDAQ Options Market (‘‘NOM’’ or 

‘‘Exchange’’) to clarify that partial 

trading days will not be counted toward 

the calculation of certain Investor 

Support Program (‘‘ISP’’) credit 

eligibility requirements pursuant to 

subsection (c)(2) of the rule. 

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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange is proposing to amend 

Rule 7014 to clarify that partial trading 

days will not be counted toward the 

calculation of certain ISP credit 

eligibility requirements pursuant to 

subsection (c)(2) of the rule, particularly 

the average daily number of shares of 

liquidity provided in orders entered by 

the member through its ISP-designated 

ports and executed in the Nasdaq 

Market Center during the month. 

The Exchange established an Investor 

Support Program that enables NASDAQ 

members to earn a monthly fee credit for 

providing additional liquidity to 

NASDAQ and increasing the NASDAQtraded volume of what are generally 

considered to be retail and institutional 

investor orders in exchange-traded 

securities (‘‘targeted liquidity’’).3 The 

goal of the ISP is to incentivize members 

to provide such targeted liquidity to the 

NASDAQ Market Center.4 The Exchange 

noted in the ISP Filing that maintaining 

and increasing the proportion of orders 

in exchange-listed securities executed 

on a registered exchange (rather than 

relying on any of the available offexchange execution methods) would 

help raise investors’ confidence in the 

fairness of their transactions and would 

benefit all investors by deepening 

NASDAQ’s liquidity pool, supporting 

the quality of price discovery, 

promoting market transparency and 

improving investor protection. 

Partial trading days are not excluded 

from the average daily number of shares 

of liquidity provided and executed 

pursuant to certain ISP credit eligibility 

criteria in the rule and the Exchange 

now proposes a change to do so.5

To further the ISP goal of attracting 

certain targeted retail and institution 

liquidity, the ISP limits ISP credit 

eligibility to targeted liquidityenhancing orders in large part by: 

Establishing a monthly ISP Execution 

Ratio 6 of 10 or above (subsection (c)(1)); 

and a monthly cap of 10 million for the 

average daily number of shares of 

liquidity provided in orders entered by 

the member through its ISP-designated 

ports and executed in the NASDAQ 

Market Center during the month 

(subsection (c)(2)). As noted, in the ISP 

Filing the Exchange did not exclude 

partial trading days from the calculation 

of order numbers pursuant to subsection 

(c)(2) of the rule. The Exchange believes 

that the inclusion of partial trading 

days 7 may serve to improperly skew the 

operative calculations. As such, the 

Exchange proposes to add new section 

(c)(3) that states that for purposes of 

determining the average daily number of 

shares of liquidity provided pursuant to 

subsection (c)(2) of this Rule, any day 

that the market is not open for the entire 

trading day will be excluded from such 

calculation.8


jlentini on DSKJ8SOYB1PROD with NOTICES