Federal Register / Vol. 75, No. 250 / Thursday, December 30, 2010 / Notices 82419 

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

2 17 CFR 240.19b–4. 

3See Amendment No. 1. 

4See Rules 620(a) and 901(c). See also Rule 1061 

applicable to Floor Brokers. 

5Securities Exchange Act Release No. 33304 

(December 9, 1993), 58 FR 65613 (December 15, 

1993)(SR–Phlx–92–34). 

6For current requirements, see e.g., Rules 1080 

and 1082. 

7The Exchange intends to separately delete 

‘‘foreign currency options participant’’ and related 

terms from its rules. 

8See Securities Exchange Act Release No. 54989 

(December 21, 2006), 71 FR 78506 (December 29, 

2006)(SR–Phlx–2006–34). 

9 15 U.S.C. 78f(b). 

10 15 U.S.C. 78f(b)(5). 

11 15 U.S.C. 78f(c)(3)(B). 

By the Commission. 

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2010–32885 Filed 12–29–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63603; File No. SR–Phlx– 

2010–180] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Revising Floor 

Qualification Examination 

December 22, 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 

10, 2010, NASDAQ OMX PHLX LLC 

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

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘Commission’’) the proposed 

rule change, and an amendment thereto 

on December 15, 2010, 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, as amended, from 

interested persons.3

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to revise its 

floor qualification examination. 

Specifically, the Exchange proposes to 

delete obsolete questions, revise 

outdated questions and add several new 

questions, as described further below. 

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 improve the Exchange’s 

program for qualification of members by 

updating its floor qualification 

examination. The Exchange has 

employed a written floor qualification 

examination, which is required for 

persons seeking to act as members on 

the trading floor,4 for many years. The 

examination, which has not been 

substantively amended for many years,5

covers many areas of the Exchange’s 

rules. 

At this time, the Exchange proposes to 

update the exam in a variety of ways. 

The exam would continue to be 

comprised of 100 questions, randomly 

and electronically selected from a 

question bank of approximately 148 

questions. The floor qualification 

examination is administered by the 

Exchange’s membership department, 

and requires a passing score of 70 

during a 75 minute testing period. 

In terms of outdated questions, the 

Exchange proposes to delete about 31 

obsolete questions, mostly pertaining to: 

(i) The ‘‘Wheel,’’ an obsolete method of 

allocating trades among specialist and 

Registered Options Traders (‘‘ROTs’’); 

(ii) ‘‘AUTO–X’’ functionality and 

specialists manually conducting an 

opening and executing trades, which 

have been replaced by the current 

trading system, Phlx XL II; and (iii) the 

‘‘ten-up’’ guarantees that preceded 

displayed size for options and the 

application of the Quote Rule to 

options.6

The Exchange also proposes to 

eliminate the foreign currency options 

qualification examination, because there 

have been no foreign currency options 

participants for many years.7 In 

addition, the Exchange no longer offers 

the foreign currency options products 

that were the subject of this 

examination, but rather now offers a 

U.S. dollar-settled foreign currency 

option,8 which trades pursuant to the 

Exchange’s options trading rules that are 

covered on the floor qualification exam. 

The Exchange proposes to modify 

approximately 17 questions pertaining 

to electronic quoting, various changes in 

priority rules and to reflect the existence 

of Options Exchange Officials (‘‘OEOs’’), 

who replaced Floor Officials, as well as 

make various minor corrections 

reflecting rule changes over time. 

Similarly, the Exchange proposes to add 

approximately 46 new questions 

reflecting trade reporting, disputes and 

OEO rulings, priority and trade 

allocation, spreads, openings, halts and 

reopening, quoting obligations, order 

types, Floor Broker obligations and Rule 

703. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act 9 in general, and furthers the 

objectives of Section 6(b)(5) of the Act 10

in particular, in that it is designed to 

prevent fraudulent and manipulative 

acts and practices, 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. In addition, the 

Exchange believes that the proposed 

rule change is consistent with Section 

6(c)(3)(B) of the Act,11 which authorizes 

exchanges to prescribe standards of 

training, experience and competence for 

persons associated with exchange 

members, and gives exchanges the 

authority to bar a natural person from 

becoming a member or a person 

associated with a member, if the person 

does not meet the standards of training, 

experience and competence prescribed 

in the rules of the exchange. The 

Exchange believes that revising its floor 

member qualification examination 

should better test the knowledge of its 

floor members, and thereby enhance the 

Exchange’s standards for training, 

experience and competence. 

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. 


jlentini on DSKJ8SOYB1PROD with NOTICES
82420 Federal Register / Vol. 75, No. 250 / Thursday, December 30, 2010 / Notices 

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

13 17 CFR 240.19b–4(f)(1). 

14 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. 63239 

(November 3, 2010), 75 FR 68846. 

4See Letters from Floyd I. Wittlin and Ann F. 

Chamberlain, Bingham McCutchen LLP, dated 

November 22, 2010 (‘‘Bingham Letter’’); David Alan 

Miller, Managing Partner and Jeffrey M. Gallant, 

Partner, Graubard Miller, dated November 22, 2010 

(‘‘Graubard Letter’’); and Joel L. Rubinstein and 

Jonathan Rochwarger, McDermott Will & Emery, 

dated November 30, 2010 (‘‘McDermott Letter’’). 

5See Nasdaq IM–5101–2(e) and Nasdaq Rule 

5005(a)(34). 

6See Securities Exchange Act Release No. 58228 

(July 25, 2008), 73 FR 44794 (July 31, 2008). 

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 

Pursuant to Section 19(b)(3)(A) of the 

Act 12 and Rule 19b–4(f)(1) 13

thereunder, the Exchange has 

designated this proposal as one that 

constitutes a stated policy, practice or 

interpretation with respect to the 

meaning, administration, or 

enforcement of an existing rule of the 

SRO, and therefore has become 

effective. 

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–PHLX–2010–180 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–2010–180. 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 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–PHLX– 

2010–180 and should be submitted on 

or before January 20, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–32891 Filed 12–29–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63607; File No. SR– 

NASDAQ–2010–137] 

Self-Regulatory Organizations, The 

NASDAQ Stock Market LLC; Order 

Approving Proposed Rule Change To 

Amend IM–5101–2 To Provide Special 

Purpose Acquisition Companies the 

Option To Hold a Tender Offer in Lieu 

of a Shareholder Vote on a Proposed 

Acquisition and Other Changes to the 

SPAC Listing Standards 

December 23, 2010. 

I. Introduction 

On October 22, 2010, The NASDAQ 

Stock Market LLC (‘‘Nasdaq’’ or 

‘‘Exchange’’) 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 to 

provide special purpose acquisition 

companies (‘‘SPACs’’) an option to hold 

a tender offer in lieu of a shareholder 

vote on a proposed acquisition and to 

make certain other changes to the 

SPACs listing requirements as discussed 

below. The proposed rule change was 

published in the Federal Register on 

November 9, 2010.3 The Commission 

received three comment letters on the 

proposal.4 This order approves the 

proposed rule change. 

II. Description of the Proposal 

As discussed in more detail below, 

the Exchange is proposing to amend its 

listing rules to provide SPACs an option 

to hold a tender offer in lieu of a 

shareholder vote on a proposed 

acquisition, to require SPACs, trying to 

complete a business combination, that 

are not subject to the Commission’s 

proxy rules to conduct a tender offer 

allowing shareholders to redeem shares 

for cash and provide information similar 

to that provided under the 

Commission’s proxy rules and to amend 

the definition of public shareholder for 

purposes of the SPAC conversion rights 

to also exclude beneficial holders of 

more than 10% of the total shares 

outstanding, consistent with the 

Exchanges existing definition of Public 

Holder.5

SPACs are companies that raise 

capital in an initial public offering 

(‘‘IPO’’) to enter into future 

undetermined business combinations 

through mergers, capital stock 

exchanges, asset acquisitions, stock 

purchases, reorganizations or other 

similar business combinations with one 

or more operating businesses or assets. 

In the IPO, SPACs typically sell units 

consisting of one share of common stock 

and one or more warrants (or fraction of 

a warrant) to purchase common stock. 

The units are separable at some point 

after the IPO. Management of the SPAC 

typically receives a percentage of the 

equity at the outset and may be required 

to purchase additional shares in a 

private placement at the time of the IPO. 

Due to their unique structure, SPACs do 

not have any prior financial history like 

operating companies. In July 2008, the 

Commission approved Nasdaq rules to 

permit the listing of securities of 

SPACs.6 Prior to that time, the Exchange 


jlentini on DSKJ8SOYB1PROD with NOTICES