812 Federal Register / Vol. 76, No. 4 / Thursday, January 6, 2011 / Notices 

25 15 U.S.C. 78f(b). 

26 15 U.S.C. 78f(b)(5). 

27 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

disseminated; (5) the requirement that 

ETP Holders deliver a prospectus to 

investors purchasing newly issued 

Shares prior to or concurrently with the 

confirmation of a transaction; and (6) 

trading information. 

In addition, the Information Bulletin 

will advise ETP Holders, prior to the 

commencement of trading, of the 

prospectus delivery requirements 

applicable to the Fund. The Exchange 

notes that investors purchasing Shares 

directly from the Fund will receive a 

prospectus. ETP Holders purchasing 

Shares from the Fund for resale to 

investors will deliver a prospectus to 

such investors. The Information Bulletin 

will also discuss any exemptive, noaction and interpretive relief granted by 

the Commission from any rules under 

the Act. 

In addition, the Information Bulletin 

will reference that the Fund is subject 

to various fees and expenses described 

in the Registration Statement. The 

Information Bulletin will also reference 

that the CFTC has regulatory 

jurisdiction over the trading of Oil 

Futures Contracts traded on U.S. 

markets. 

The Information Bulletin will also 

disclose the trading hours of the Shares 

of the Fund and that the NAV for the 

Shares is calculated after 4 p.m. E.T. 

each trading day. The Bulletin will 

disclose that information about the 

Shares of the Fund is publicly available 

on the Fund’s Web site. 

2. Statutory Basis 

The proposed rule change is 

consistent with Section 6(b) of the 

Act,25 in general, and furthers the 

objectives of Section 6(b)(5),26 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 

mechanism of a free and open market 

and a national market system. The 

Exchange believes that the proposed 

rule change will facilitate the listing and 

trading of an additional type of 

exchange-traded product that will 

enhance competition among market 

participants, to the benefit of investors 

and the marketplace. In addition, the 

listing and trading criteria set forth in 

NYSE Equities Rule 8.200 are intended 

to protect investors and the public 

interest. 

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 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 

No written comments were solicited 

or received with respect to 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 (i) 

as the Commission may designate up to 

90 days of such date 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 rule-comments@

sec.gov. Please include File Number SR– 

NYSEArca–2010–119 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–NYSEArca–-2010–119. 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 

available publicly. All submissions 

should refer to File Number SR– 

NYSEArca–2010–119 and should be 

submitted on or before January 27, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.27

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–33363 Filed 1–5–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63626; File No. SR–Phlx– 

2010–185] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to a 

Pilot Program for Cabinet Trading 

Below $1.00 Per Contract Until June 1, 

2011 

December 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 December 

21, 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 and 

II, below, which Items have been 

prepared by the Exchange. The 

Commission is publishing this notice to 


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Federal Register / Vol. 76, No. 4 / Thursday, January 6, 2011 / Notices 813 

3Cabinet or accommodation trading of option 

contracts is intended to accommodate persons 

wishing to effect closing transactions in those series 

of options dealt in on the market. 

4Orders must be submitted to the specialist in 

writing. 

5Specialists and ROTs are not subject to the 

requirements of Rule 1014 in respect of orders 

placed pursuant to this Rule. Also, the provisions 

of Rule 1033(b) and (c), Rule 1034 and Rule 1038 

do not apply to orders placed in the cabinet. 

Cabinet transactions are not reported on the ticker. 

6See Exchange Rule 1059. 

7See U.S.C. 78f(b). 

8See U.S.C. 78f(b)(5a). 

9 15 U.S.C. 78s(b)(3)(A). 

10 17 CFR 240.19b–4(f)(6). 

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 To Amend [sic]π 

Exchange Rule 1059 to allow cabinet 

trading to take place below $1 per 

option contract. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://www.nasdaqtrader.com/ 

micro.aspx?id=PHLXRulefilings, 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 the proposed rule 

change is to allow cabinet trading to 

take place below $1 per option contract. 

Cabinet trading is generally conducted 

in accordance with the Exchange Rules, 

except as provided in Exchange Rule 

1059, Accommodation Transactions, 

which sets forth specific procedures for 

engaging in cabinet trades.3

The purpose of this rule change is to 

temporarily amend the procedures 

through June 1, 2011 to allow 

transactions to take place in open outcry 

at a price of at least $0 but less than $1 

per option contract. These lower priced 

transactions would be traded pursuant 

to the same procedures applicable to $1 

cabinet trades, except that (i) bids and 

offers for opening transactions would 

only be permitted to accommodate 

closing transactions in order to limit use 

of the procedure to liquidations of 

existing positions, and (ii) the 

procedures would also be made 

available for trading in options 

participating in the Penny Pilot 

Program. 

The Exchange believes that allowing a 

price of at least $0 but less than $1 will 

better accommodate the closing of 

options positions in series that are 

worthless or not actively traded, 

particularly due to recent market 

conditions which have resulted in a 

significant number of series being outof-the-money. For example, a market 

participant might have a long position 

in a call series with a strike price of 

$100 and the underlying stock might 

now be trading at $30. In such an 

instance, there might not otherwise be a 

market for that person to close-out its 

position even at the $1 cabinet price 

(e.g., the series might be quoted no bid). 

Exchange Rule 1059 currently 

provides for cabinet transactions to 

occur via open outcry at a cabinet price 

of a $1 per option contract in any 

options series open for trading in the 

Exchange. A specialist registered in 

each class of option contracts supervises 

the operation of the cabinet for that 

class. Only closing limit orders at a 

price of $1 per option contract for the 

accounts of customer, firm, specialists 

and Registered Options Traders 

(‘‘ROTs’’) may be placed in the cabinet.4

All orders placed in the cabinet are 

assigned priority based upon the 

sequence in which such orders are 

received by the specialist. All closing 

bids and offers must be submitted to the 

specialist in writing, and the specialist 

shall effect all closing cabinet 

transactions by matching such orders 

placed with him. Bids or offers on 

orders to open for the accounts of 

customer, firm, specialists and ROTs 

may be made at $1 per option contract, 

but such orders may not be placed in 

and must yield to all orders in the 

cabinet. Specialists effect all cabinet 

transactions by matching closing 

purchase or sale orders which have been 

placed in the cabinet or, provided there 

is no matching closing purchase or sale 

order in the cabinet, by matching a 

closing purchase or sale order in the 

cabinet with an opening purchase or 

sale order.5 All cabinet transactions are 

reported to the Exchange following the 

close of each business day.6

Notwithstanding the provisions of 

Rule 132, any (i) member, (ii) member 

organization, or (iii) other person who is 

a non-member broker or dealer and who 

directly or indirectly controls, is 

controlled by, or is under common 

control with, a member or member 

organization (any such other person 

being referred to as an affiliated person) 

may effect any transaction as principal 

in the over-the-counter market in any 

class of option contracts listed on the 

Exchange for a premium not in excess 

of $1.00 per contract. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with Section 

6(b) 7 of the Securities Exchange Act of 

1934 (the ‘‘Act’’), in general, and furthers 

the objectives of Section 6(b)(5) 8 in 

particular in that it is 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. The Exchange believes 

that allowing for liquidations at a price 

less than $1 per option contract will 

better facilitate the closing of options 

positions that are worthless or not 

actively trading, especially in Penny 

Pilot issues where cabinet trades are not 

otherwise permitted. 

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 foregoing rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act 9 and Rule 19b–4(f)(6) 

thereunder 10 because the proposal does 

not: (i) Significantly affect the 

protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) by its 

terms, become operative for 30 days 

from the date on which it was filed, or 


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814 Federal Register / Vol. 76, No. 4 / Thursday, January 6, 2011 / Notices 

11 In addition, Rule 19b–4(f)(6) provides that the 

Exchange must provide the Commission 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. 

12See CBOE Rule 6.54, Interpretations and 

Policies .03. 

13For purposes only of waiving the operative 

delay for this proposal, the Commission has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

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

14 15 U.S.C. 78s(b)(3)(C). 

15 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. 63305 

(November 10, 2010), 75 FR 70331 (‘‘Notice’’). 

4A specialist unit may have one or more 

individual specialists. See proposed Supplementary 

Material .05 to Rule 511. 

5An SQT is a Registered Options Trader (‘‘ROT’’) 

who has received permission from the Exchange to 

generate and submit option quotations 

electronically in options to which such SQT is 

assigned. An SQT may only submit such quotations 

while such SQT is physically present on the floor 

of the Exchange. See Rule 1014(b)(ii)(A). 

6An RSQT is an ROT that is a member or member 

organization with no physical trading floor 

presence who has received permission from the 

Exchange to generate and submit option quotations 

electronically in options to which such RSQT has 

been assigned. An RSQT may only submit such 

quotations electronically from off the floor of the 

Exchange. See Rule 1014(b)(ii)(B). 

7SQTs also include Directed SQTs (‘‘DSQTs’’) and 

Directed RSQTs (‘‘DRSQTs’’), which are SQTs and 

RSQTs that receive a Directed Order. Exchange Rule 

1080(l)(i)(A) defines Directed Order. 

such shorter time as the Commission 

may designate if consistent with the 

protection of investors and the public 

interest.11

The Exchange has requested that the 

Commission waive the 30-day operative 

delay period. The Commission hereby 

grants the request. The Commission 

notes that the proposal is nearly 

identical to the rules of another 

exchange.12 Therefore, the Commission 

believes it is consistent with the 

protection of investors and the public 

interest to waive the 30-day operative 

delay and designates the proposal as 

operative upon filing.13

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.14

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–2010–185 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–2010–185. 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 

available publicly. All submissions 

should refer to File Number SR–Phlx– 

2010–185 and should be submitted on 

or before January 27, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–33364 Filed 1–5–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63627; File No. SR–Phlx2010–153] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX LLC; Order 

Approving a Proposed Rule Change To 

Update and Streamline the Process for 

Specialist Evaluations and Clarify the 

Time Within Which SQTs and RSQTs 

Must Begin To Electronically Quote 

After Assignment 

December 30, 2010. 

I. Introduction 

On November 5, 2010, the NASDAQ 

OMX PHLX LLC (‘‘Phlx’’ 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 update and streamline the 

process for specialist evaluations and 

clarify the time within which Streaming 

Quote Traders (‘‘SQTs’’) and Remote 

Streaming Quote Traders (‘‘RSQTs’’) 

must begin to electronically quote after 

assignment. The proposed rule change 

was published for comment in the 

Federal Register on November 17, 

2010.3 The Commission received no 

comment letters regarding the proposal. 

This order approves the proposed rule 

change. 

II. Description of the Proposal 

The purpose of the proposed rule 

change is to amend Phlx By-Law Article 

XI Section 11–1; Rules 507, 508, 510, 

511, and 515; and OFPA C–8 to revise 

the process the Exchange will use to 

assess specialist performance, as well as 

to ensure timely electronic quotations 

by SQTs and RSQTs and the ability of 

the Exchange to control allocation 

transfers. 

Rules 500 through 599 (the 

‘‘Allocation and Assignment Rules’’) 

generally describe the process for: 

application for becoming and 

appointment of specialists; allocation of 

classes of options to specialist units and 

individual specialists; 4 application for 

becoming and approval of SQTs 5 and 

RSQT6 (collectively, the ‘‘Streaming 

Quote Traders’’) 7 and assignment of 

options to them; and performance 

evaluations for specialist units and 

SQTs. The Allocation and Assignment 

Rules also indicate, among other things, 

under what circumstances new 

specialist allocations and Streaming 

Quote Trader assignments may not be 

made. 

Rules 511 and 515 deal with specialist 

evaluations and certain allocation 

procedures. Currently, Rule 511 


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