80872 Federal Register / Vol. 75, No. 246 / Thursday, December 23, 2010 / Notices 

proposed rule’s impact on efficiency, competition, 

and capital formation. See 15 U.S.C. 78c(f). 

12 15 U.S.C. 78f(b)(5). 

13See supra Section II.A.2. 

14 15 U.S.C. 78s(b)(2). 

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

16 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3A ‘‘round lot’’ order is an order for a quantity 

that is a multiple of 100 (100, 200, 300, etc.). An 

‘‘odd lot’’ order is an order for a quantity that is less 

than 100. A ‘‘mixed lot’’ order is an order for a 

quantity that is greater than 100 but not a multiple 

of 100 (135, 372, 1126, etc.). 

4 15 U.S.C. 78s(b)(1). 

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

particular, the Commission finds that 

the proposed rule change is consistent 

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

of the Act,12 which requires, among 

other things, that the Exchange’s rules 

be designed to promote just and 

equitable principles of trade, to foster 

cooperation and coordination with 

persons engaged in regulating, clearing, 

settling, processing information with 

respect to, and facilitating transactions 

in securities, 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. The 

Commission agrees with the Exchange 

that the elimination of the Validated 

Cross functionality will simplify CHX’s 

order entry process, eliminate certain 

regulatory concerns presented by the 

Validated Cross functionality, and 

reduce the burden on the Exchange to 

maintain overlapping order entry 

functionality.13

The Commission finds good cause, 

pursuant to Section 19(b)(2) of the 

Act,14 for approving the proposed rule 

change prior to the 30th day after 

publication of notice in the Federal 

Register. The Exchange represents that 

accelerated approval will allow the 

Exchange to implement these changes 

prior to the application of its customary 

end-of-the-year software change freeze, 

and thereby minimize the systems and 

operational risks it says are inherent to 

coding changes made late in the year. 

Further, accelerated approval of the 

proposed rule change will allow the 

Exchange to more quickly address 

certain regulatory concerns associated 

with the Validated Cross functionality. 

VI. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,15 that the 

proposed rule change (SR–CHX–2010– 

25) be, and it hereby is, approved on an 

accelerated basis. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–32223 Filed 12–22–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63566; File No. SR–CBOE– 

2010–115] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Modify How Odd-Lots 

Are Handled on CBSX 

December 16, 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 December 

14, 2010, the Chicago Board Options 

Exchange, Incorporated (‘‘Exchange’’ or 

‘‘CBOE’’) 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 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 Substance of 

the Proposed Rule Change 

The Exchange proposes to modify 

how odd-lot orders are handled on the 

CBOE Stock Exchange (‘‘CBSX’’). The 

text of the proposed rule change is 

available on the Exchange’s Web site 

(http://www.cboe.org/Legal), at the 

Exchange’s principal office, and on the 

Commission’s Web site at http:// 

www.sec.gov/rules/sro.shtml. 

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 Exchange has prepared summaries, 

set forth in sections A, B, and C below, 

of the most significant parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Currently, CBSX handles and 

executes round lot orders differently 

from the manner in which it handles 

and executes odd lot and mixed lot 

orders.3 If CBSX is not displaying the 

NBBO and step-up is not achieved 

pursuant to the CBSX flash process in 

Rule 52.6, the round lot order is then 

routed to the exchange displaying the 

NBBO for execution. Odd lot orders, 

however, currently are not routed to the 

exchange displaying the NBBO for 

execution. The proposed change will 

ensure that odd and mixed lot orders 

will be handled and executed in a more 

consistent manner with round lot 

orders. 

Under the proposed rule change, OddLot orders will be matched by the CBSX 

System against interest at the best price 

in the CBSX Book. Odd-Lot orders (or 

the odd-lot portion of a mixed lot order) 

that are not marketable will be 

maintained in the System so that they 

may trade against later submitted orders 

(they will be traded using CBSX’s 

matching rules). Marketable Odd-lot 

orders will be handled similar to round 

lot orders. If fulfilling an Odd-Lot order 

would result in an impermissible tradethrough of another exchange, the order 

will be routed to other exchanges to be 

filled at prices better than the CBSX 

disseminated price. If an execution is 

not attained at the away exchange(s), the 

returned order is eligible for execution 

on CBSX. We note that the flash process 

utilized by CBSX prior to routing away 

orders will not be employed for Odd-lot 

orders. 

If an incoming Odd-lot order trades 

against a quote in the CBSX Book, the 

new quantity remaining in the quote 

will be rounded down to the nearest 

lower round-lot amount (zero or 

multiple of 100) for display purposes, 

with the remaining Odd-Lot amount 

being cancelled. If an incoming order 

trades against a limit order resting on 

the CBSX Book and an Odd-Lot amount 

remains from the limit order resting on 

the CBSX Book, that Odd-Lot amount 

will remain in the system eligible for 

execution but will not be displayed. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) 4 and the rules and regulations 

thereunder and, in particular, the 

requirements of Section 6(b) of the Act.5

Specifically, the Exchange believes the 

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Federal Register / Vol. 75, No. 246 / Thursday, December 23, 2010 / Notices 80873 

6 15 U.S.C. 78f(b)(5). 

7 15 U.S.C. 78s(b)(3)(A). 

8 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, along with a brief 

description and text of 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. 

9For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

and capital formation. See 15 U.S.C. 78c(f). 

10 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 63335 

(November 18, 2010), 75 FR 71783. 

4 In Amendment No. 1, the Exchange corrected an 

error in the purpose section of the original filing 

purpose section changing the current duration of 

the Step-Up Display Period from 25 milliseconds to 

10 milliseconds. 

5Amendment No. 2 replaces in its entirety the 

original filing and Amendment No. 1. In 

Amendment No. 2, the Exchange proposes to: (a) 

change the Step-Up Display Period (as defined 

below) from 25 milliseconds to 10 milliseconds, 

and (b) eliminate the discretion in the rule to vary 

the Step-Up Display Period without a rule filing. 

proposed rule change is consistent with 

the Section 6(b)(5) 6 requirements that 

the rules of an exchange be 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. Handling odd and 

mixed lot orders in the same manner as 

round lot orders allows CBSX to 

simplify the handling of odd-lot orders 

to the benefit of investors. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

CBOE 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 

The Exchange neither solicited nor 

received comments on the proposal. 

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 from the date on 

which it was filed, or such shorter time 

as the Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 7 and Rule 19b– 

4(f)(6) thereunder.8

The Exchange has requested that the 

Commission waive the 30-day operative 

delay. Waiver of the 30-day operative 

delay would allow CBSX to 

immediately begin processing odd-lot 

orders and mixed-lot orders in a manner 

similar to its processing of round-lot 

orders. The Commission believes that 

waiving the 30-day operative delay is 

consistent with the protection of 

investors and the public interest and 

designates the proposal operative upon 

filing.9

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. 

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–CBOE–2010–115 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–CBOE–2010–115. 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, 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–CBOE–2010–115 and 

should be submitted on or before 

January 13, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–32224 Filed 12–22–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63572; File No. SR–EDGA– 

2010–18] 

Self-Regulatory Organizations; EDGA 

Exchange, Inc.; Notice of Filing of 

Amendment No. 2 to Proposed Rule 

Change To Amend EDGA Rules 

11.9(b)(1)(C) and 11.5(c)(7) Regarding 

Step-Up Orders 

December 17, 2010. 

On November 8, 2010, EDGA 

Exchange, Inc. (the ‘‘Exchange’’ or 

‘‘EDGA’’) 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 regarding Step-Up 

Orders. The proposed rule change was 

published for comment in the Federal 

Register on November 24, 2010.3 On 

November 23, 2010, the Exchange 

submitted Amendment No. 1 to the 

proposed rule change.4 On December 

14, 2010, the Exchange submitted 

Amendment No. 2 to the proposed rule 

change, as described in Items I and II 

below, which items have been prepared 

by the Exchange.5 The Commission is 

publishing this notice of Amendment 

No. 2 to solicit comments on the 

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