77034 Federal Register / Vol. 75, No. 237 / Friday, December 10, 2010 / Notices 

4 15 U.S.C. 78s(b)(3)(A). 

5 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires a self-regulatory organization to 

provide the Commission with 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. ISE 

has satisfied this requirement. 

6 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Changes are marked to the rule text that appears 

in the electronic manual of NASDAQ found at 

http://nasdaqomx.cchwallstreet.com. 

this filing, 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 4 and Rule 

19b–4(f)(6) thereunder.5

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–ISE–2010–116 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–ISE–2010–116. 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, 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 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–ISE– 

2010–116 and should be submitted on 

or before January 3, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.6

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–31050 Filed 12–9–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63439; File No. SR– 

NASDAQ–2010–158] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Clarify 

Market Maker Quote Management 

Procedures 

December 6, 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 December 

3, 2010, The NASDAQ Stock Market 

LLC (‘‘Nasdaq’’ or ‘‘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 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 is filing with the 

Commission a proposed rule change to 

clarify market maker quote management 

procedures. 

The text of the proposed rule change 

is below. Proposed new language is 

italicized and proposed deletions are in 

brackets.3

* * * * * 

4613. Market Maker Obligations 

A member registered as a Market 

Maker shall engage in a course of 

dealings for its own account to assist in 

the maintenance, insofar as reasonably 

practicable, of fair and orderly markets 

in accordance with this Rule. 

(a) Quotation Requirements and 

Obligations 

(1) No Change. 

(2) Pricing Obligations. For NMS 

stocks (as defined in Rule 600 under 

Regulation NMS) a Market Maker shall 

adhere to the pricing obligations 

established by this Rule during Regular 

Market Hours. 

(A)–(E) No Change. 

(F) Quotation Creation and 

Adjustment. For each Issue in which a 

Market Maker is registered, the System 

shall, in the absence of a quotation that 

complies with this Rule entered by that 

Market Maker, automatically create a 

quotation for display to comply with 

this Rule. System-created compliant 

displayed quotations will thereafter be 

allowed to rest and not be further 

adjusted by the System unless the 

relationship between the quotation and 

its related National Best Bid or National 

Best Offer, as appropriate, shrinks to the 

greater of: (a) 4 percentage points, or, (b) 

one-quarter the applicable percentage 

necessary to trigger an individual stock 

trading pause as described in NASDAQ 

Rule 4120(a)(11), or expands to within 

that same percentage less 0.5%, 

whereupon the System will 

immediately re-adjust and display the 

Market Maker’s quote to the appropriate 

Designated Percentage set forth in 

section (D) above. [As the System allows 

for multiple attributable quotations by a 

Market Maker in an issue,] 

[q]Quotations originally entered by 

Market Makers which have not been 

modified by the System upon entry or 

after resting on the book shall be 

allowed to move freely towards [or away 

from] the National Best Bid or National 

Best Offer, as appropriate, for potential 

execution. 

(G)–(K) No Change. 

(b)–(e) No Change. 

* * * * * 

4752. Opening Process 

(a) No Change. 

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Federal Register / Vol. 75, No. 237 / Friday, December 10, 2010 / Notices 77035 

4 15 U.S.C. 78f. 

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

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

7 17 CFR 240.19b–4(f)(6). When filing a proposed 

rule change pursuant to Rule 19b–4(f)(6) under the 

Act, an exchange is required 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 Commission 

notes that the Exchange has satisfied this 

requirement. 

8 17 CFR 240.19b–4(f)(6)(iii). 

9 Id. 

10For the purposes only of waiving the operative 

date of this proposal, the Commission has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). 

(b) Trading Prior To Normal Market 

Hours. The system shall process all 

eligible Quotes/Orders at 7 a.m.: 

(1) No Change. 

(2) [At] No earlier than between 9:25 

a.m. and 9:30 a.m., the system shall 

open all remaining unopened Quotes in 

accordance with each firm’s 

instructions. 

(3)–(4) No Change. 

(c)–(d) No Change. 

* * * * * 

(b) Not applicable. 

(c) Not applicable. 

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 

Recently, the Exchange adopted rules 

enhancing market maker quotation 

obligations. In connection with the 

implementation with these new 

standards, the Exchange proposes to 

clarify its quote management procedures 

when market makers fail to enter 

quotations in compliance with these 

new rules. In short, should a market 

maker fail to enter, or appropriately 

update, their quotations so as to remain 

in compliance with the new standards, 

the Exchange will create or adjust such 

quotations to prices that will ensure 

compliance. 

In addition, the Exchange proposes to 

adjust the current fixed time of 9:25 a.m. 

for opening previously unopened 

quotations so as to allow the opening of 

such quotations at time periods closer to 

the 9:30 a.m. commencement of normal 

market trading. 

The Exchange believes that these 

proposals both enhance compliance 

with the new market maker quotation 

standards and recognize the increased 

liquidity being provided by marker 

makers in the minutes before market 

open. 

2. Statutory Basis 

NASDAQ believes that the proposed 

rule change is consistent with the 

provisions of Section 6 of the Act,4 in 

general, and with Sections 6(b)(5) of the 

Act,5 in particular, in that the proposal 

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 

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 Exchange believes 

that the proposed rule meets these 

requirements in that it enhances 

compliance with the new market maker 

quotation standards and recognizes the 

increased liquidity being provided by 

marker makers in the minutes before 

market open. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange 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. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

Written comments on the proposed 

rule change 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: (1) Significantly affect 

the protection of investors or the public 

interest; (2) impose any significant 

burden on competition; and (3) 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, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 6 and Rule 19b– 

4(f)(6) thereunder.7

A proposed rule change filed under 

Rule 19b–4(f)(6) normally may not 

become operative prior to 30 days after 

the date of filing.8 However, Rule 19b– 

4(f)(6) 9 permits the Commission to 

designate a shorter time if such action 

is consistent with the protection of 

investors and the public interest. 

Nasdaq has requested that the 

Commission waive the 30-day operative 

delay. 

The Commission has considered 

Nasdaq’s request to waive the 30-day 

operative delay. The Commission 

believes that waiving the 30-day 

operative delay is consistent with the 

protection of investors and the public 

interest, as it will enable the Exchange 

to implement the proposed change 

consistent with the implementation date 

for the new market maker pricing 

obligations.10

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–NASDAQ–2010–158 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–2010–158. This 

file number should be included on the 

mstockstill on DSKH9S0YB1PROD with NOTICES

77036 Federal Register / Vol. 75, No. 237 / Friday, December 10, 2010 / Notices 

11 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. 62818 

(September 1, 2010), 75 FR 54665 (‘‘Notice’’). 

4See Letters to Elizabeth M. Murphy, Secretary, 

Commission, from Tom A. Alberg, Managing 

Director and Founder, Madrona Venture Group, 

dated December 1, 2010 (‘‘Madrona Letter’’); 

Michael R. Trocchio, Bingham McCutchen LLP, 

dated October 3, 2010 (‘‘Pink OTC Markets Letter’’); 

and William F. Galvin, Secretary of the 

Commonwealth, Commonwealth of Massachusetts, 

dated September 28, 2010 (‘‘MSD Letter’’). 

5See Securities Exchange Act Release No. 63105 

(October 14, 2010), 75 FR 64772 (October 20, 2010). 

6See infra Section II for a description of 

Amendment No. 1. 

7This description does not review every rule 

proposed by BX that has been filed as part of its 

proposed rule change; rather, it focuses on the most 

prominent rules considered in review of the BX’s 

proposal. See Notice, supra note 3, for a description 

of the proposed rule change. See also Exhibit 5 to 

the Form 19b–4 for all the rules proposed by BX, 

available at http://www.sec.gov/rules/sro/bx/2010/ 

34-62818-ex5.pdf. 

8See Amendment No. 1. As originally proposed, 

the proposed rule change provided that a BX-listed 

company should refer to its listing as on the ‘‘BX.’’ 

9See Notice, supra note 3. 

10See 17 CFR 242.600 et seq. 

11OTC trades of BX-listed securities would be 

reported to the Financial Industry Regulatory 

Authority (‘‘FINRA’’) OTC Reporting Facility. See 

Notice, supra note 3. 12See 17 CFR 240.3a51–1. 13 15 U.S.C. 77r; Securities Act Rule 146. In 

addition, some state laws and regulations may 

provide an exemption from certain registration or 

‘‘blue sky’’ requirements for companies listed on the 

Boston Stock Exchange, based on the higher listing 

standards previously applied by the former Boston 

Stock Exchange. The proposed listing rules would 

provide that the Exchange will take action to delist 

any company listed on BX that attempts to rely on 

such an exemption. Companies would also agree 

not to rely on any such exemption as a provision 

of the BX Listing Agreement. 

14 15 U.S.C. 78l(b). 15 17 CFR 240.10A–3. Certain companies listing 

on BX will be permitted to phase in compliance 

with the audit committee and compensation 

committee requirements following their listing. 

With respect to the audit committee requirements, 

a company listing in connection with its initial 

public offering would be required to have one 

independent director on the committee at the time 

of listing; a majority of independent members 

within 90 days of the date of effectiveness of the 

company’s registration statement; and all 

independent members within one year of the date 

of effectiveness of the company’s registration 

statement. 

16With respect to the compensation committee 

requirement, a company listing in connection with 

its initial public offering, upon emerging from 

bankruptcy, or that otherwise was not subject to a 

substantially similar requirement prior to listing 

(such as a company only traded in the OTC market) 

would be required to have one independent director 

on the committee at the time of listing; a majority 

of independent members within 90 days of listing; 

and all independent members within one year of 

listing. 

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, 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 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– 

NASDAQ–2010–158 and should be 

submitted on or before January 3, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–31051 Filed 12–9–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63448; File No. SR–BX– 

2010–059] 

Self-Regulatory Organizations; 

NASDAQ OMX BX, Inc.; Order 

Instituting Proceedings To Determine 

Whether To Disapprove Proposed Rule 

Change, as Modified by Amendment 

No. 1, To Create a Listing Market on 

the Exchange 

December 7, 2010. 

I. Introduction 

On August 20, 2010, NASDAQ OMX 

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

Securities and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’ or ‘‘Exchange Act’’) 1 and 

Rule 19b–4 thereunder,2 a proposed rule 

change to create a new listing market. 

The proposed rule change was 

published for comment in the Federal 

Register on September 8, 2010.3 The 

Commission received three comments 

on the proposal.4 The Commission 

subsequently extended the time period 

in which to either approve the proposed 

rule change, disapprove the proposed 

rule change, or institute proceedings to 

determine whether to disapprove the 

proposed rule change, to December 7, 

2010.5 On December 6, 2010, BX 

submitted Amendment No. 1 to the 

proposed rule change.6 This order 

institutes proceedings to determine 

whether to disapprove the proposed 

rule change, as modified by Amendment 

No. 1. Institution of disapproval 

proceedings, however, does not indicate 

that the Commission has formulated any 

conclusions with respect to any of the 

issues involved. 

II. Description of the Proposal 7

The Exchange proposes to create a 

new listing market, to be called the ‘‘BX 

Venture Market.’’ 8 The Exchange has 

stated that it expects that the securities 

listed on BX would not be classified as 

national market system (‘‘NMS’’) 

securities.9 As a result, BX-listed 

securities would not be subject to an 

NMS plan and would not be subject to 

Regulation NMS under the Act.10 BXlisted securities would trade on the 

Exchange and also could trade over-thecounter (‘‘OTC’’).11 Further, BX-listed 

securities would be considered penny 

stocks under Exchange Act Rule 3a51– 

1, unless they qualify for an exemption 

from the definition of a penny stock.12

No ‘‘blue sky’’ exemption would be 

available under Section 18 of the 

Securities Act of 1933 or the rule 

adopted thereunder,13 so companies 

would be required to satisfy state law 

registration requirements and other state 

laws that regulate the sale and offering 

of securities. In addition, BX would not 

list any company that meets the 

quantitative (e.g., financial) 

requirements for listing on The 

NASDAQ Stock Market LLC (‘‘Nasdaq’’). 

To qualify for initial listing on BX, a 

company must be registered under 

Section 12(b) of the Act 14 and be 

current in its periodic filings with the 

Commission. The company would also 

be required to have a fully independent 

audit committee comprised of at least 

three members and comply with the 

requirements of Rule 10A–3 under the 

Exchange Act.15 The company would be 

required to have its independent 

directors make compensation decisions 

for executive officers (either by having 

the independent directors meet in 

executive session or by having them sit 

on a compensation committee), and 

independent directors would be 

required to meet on a regular basis in 

executive sessions.16 The company’s 

mstockstill on DSKH9S0YB1PROD with NOTICES