8416 Federal Register / Vol. 75, No. 36 / Wednesday, February 24, 2010 / Notices 

7 17 CFR 200.30–3(a)(29). 

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

2 17 CFR 240.19b–4. 

3Amendment No. 1 added clarifying language 

regarding the implementation of the proposed rule 

change and removed erroneously included 

information. 

4A Directed Order is any Customer Order to buy 

or sell which has been directed to a particular 

Market Maker by an OFP. See Chapter I, Section 

1(21) (sic) of the BOX Rules. Terms not otherwise 

defined herein shall have the meaning assigned to 

them in the BOX Rules. 

5See Chapter V, Section 18 of the BOX Rules. 

6The proposal clarifies in Section 5(c)(iii)(2)(b)(2) 

and (3) that when the EP does not PIP the Directed 

Order and releases it to the BOX Book, the Directed 

Order will immediately execute against the BOX 

Book if the BOX Best Bid or Offer is equal to or 

better than the NBBO and GDO. Any remaining 

quantity not executed will immediately be exposed 

to BOX Participants at the better of the NBBO or 

GDO price. This exposure period will last three (3) 

seconds, during which time any Options 

Participant, except for the EP, may submit an order 

to the BOX Book in response. Any orders submitted 

to the BOX Book during the three second period 

will execute immediately against any remaining 

quantity of the Directed Order, in time priority. 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for Web 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 

BATS’ principal office. 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 No. 4–443 and 

should be submitted on or before March 

17, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.7

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–3545 Filed 2–23–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Sunshine Act Meeting 

Notice is hereby given, pursuant to 

the provisions of the Government in the 

Sunshine Act, Public Law 94–409, that 

the Securities and Exchange 

Commission will hold an Open Meeting 

on February 24, 2010 at 10 a.m., in the 

Auditorium, Room L–002. 

Commissioner Casey, as duty officer, 

determined that no earlier notice thereof 

was possible. 

The subject matter of the Open 

Meeting will be: 

Item 1: The Commission will consider 

whether to adopt amendments to Rules 

201 and 200(g) of Regulation SHO 

relating to short sale restrictions. 

Item 2: The Commission will consider 

whether to publish a statement 

regarding its continued support for a 

single-set of high-quality globally 

accepted accounting standards and its 

ongoing consideration of incorporating 

International Financial Reporting 

Standards into the financial reporting 

system for U.S. issuers. 

At times, changes in Commission 

priorities require alterations in the 

scheduling of meeting items. 

For further information and to 

ascertain what, if any, matters have been 

added, deleted or postponed, please 

contact: 

The Office of the Secretary at (202) 

551–5400. 

Dated: February 19, 2010. 

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2010–3792 Filed 2–22–10; 11:15 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–61531; File No. SR–BX– 

2010–009] 

Self-Regulatory Organizations; 

NASDAQ OMX BX, Inc.; Notice of Filing 

of Proposed Rule Change and 

Amendment No. 1 Thereto Relating to 

the Directed Order Process on the 

Boston Options Exchange Facility 

February 17, 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 January 

25, 2010, NASDAQ OMX BX, Inc. (the 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the self-regulatory 

organization. The Exchange filed 

Amendment No 1. to the proposed rule 

change on February 10, 2010.3 The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change, as amended, from interested 

persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend the 

Rules of the Boston Options Exchange 

Group, LLC (‘‘BOX’’) to modify the 

Directed Order process on BOX. The 

text of the proposed rule change is 

available from the principal office of the 

Exchange, at the Commission’s Public 

Reference Room and also on the 

Exchange’s Internet website at http:// 

nasdaqomxbx.cchwallstreet.com/ 

NASDAQOMXBX/Filings/. 

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 Exchange is proposing 

modifications to the Directed Order 

process on BOX.4 When a BOX Market 

Maker indicates its interest in receiving 

Directed Orders, the receiving Market 

Maker is referred to as the Executing 

Participant (‘‘EP’’). Specifically, the 

Exchange is proposing to automate the 

creation of the Guaranteed Directed 

Order (‘‘GDO’’) and the manner in which 

the quote of the EP is handled during 

the Directed Order process. 

‘Quote Shelving’ and ‘GDO’ 

Upon receipt of a Directed Order an 

EP must either submit the Directed 

Order to the PIP 5 or send the Directed 

Order to the BOX Book. Currently, when 

the EP sends the Directed Order to the 

BOX Book and the EP’s quotation on the 

opposite side of the market from the 

Directed Order is equal to the National 

Best Bid or Offer (‘‘NBBO’’) and the 

Directed Order is also executable against 

the NBBO, the EP must guarantee 

execution of the Directed Order at the 

current NBBO for at least the size of his 

quote. This guarantee is called the GDO. 

The EP must immediately send the 

Directed Order with the GDO to the 

Trading Host. Sending the GDO to the 

Trading Host enables it to 

simultaneously take down or ‘shelve’ 

the EP’s quote and any pending quote 

updates while the Directed Order is 

being exposed on the BOX Book.6


pwalker on DSK8KYBLC1PROD with NOTICES
Federal Register / Vol. 75, No. 36 / Wednesday, February 24, 2010 / Notices 8417 

7See Section 5(c)(ii)(5). If the Directed Order is 

modified once the Trading Host has automatically 

established the GDO, then the modified Directed 

Order shall no longer be considered a Directed 

Order and shall be immediately released to the BOX 

Book and treated as a regular order. Upon 

modification or cancellation of the Directed Order, 

the Trading Host will immediately reestablish the 

EP’s quote, including any of the EP’s pending quote 

modifications, with a new time priority; or in the 

case of a pending quote cancellation, the EP’s quote 

will be cancelled. If no GDO had been established, 

then the modified Directed Order shall be 

resubmitted to the EP pursuant to paragraph 

(c)(ii)(1). Also, it shall be considered conduct 

inconsistent with just and equitable principles of 

trade for any Options Participant or person to 

communicate with an EP about the terms or 

conditions of a Directed Order prior to its outcome 

in the BOX Trading Host (e.g. execution, 

cancellation). 

8Under the proposal the EP’s obligations when 

using the PIP remain the same, however in some 

instances the obligation will be met automatically 

by the Trading Host. Upon submission of the 

Directed Order to the PIP the Trading Host will only 

accept a Primary Improvement Order priced at or 

better than (i) the GDO or (ii) the NBBO at the time 

the EP sent the Directed Order to the PIP, 

whichever is better for the Directed/PIP Order. In 

addition, if a GDO has been automatically 

generated, then the Trading Host will prohibit the 

EP from adjusting his quotation prior to submitting 

the Directed Order to the PIP process. 

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

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

Under the proposal, the GDO will be 

automatically created by the Trading 

Host instead of by the EP. The Trading 

Host will use the shelved EP quote as 

the GDO. In addition, the GDO creation 

and the EP’s quote shelving will be 

moved to an earlier point in the 

Directed Order process. Where presently 

they occur only when the Directed 

Order is sent to the BOX Book, they will 

now take place immediately upon the 

Trading Host’s receipt of the Directed 

Order from the submitting OFP. Once 

the GDO has been generated by the 

Trading Host, the EP will systemically 

be prohibited from posting a quotation. 

The EP’s pending quote will not be 

released until either (i) the Directed 

Order is modified by the submitting 

OFP;7 (ii) the EP PIPs the Directed 

Order;8 or (iii) the Directed Order is 

submitted to the BOX Book, and either 

one of the following occurs: (a) The 

Directed Order trades in full; (b) the 

Directed Order exposition ends; or (c) 

the Directed Order is modified or 

cancelled by the submitting OFP during 

such exposition. 

Under the proposal, if a GDO has been 

automatically generated and is pending, 

then upon receipt by the Trading Host 

of a subsequent Directed Order for the 

same EP for the same series and side of 

the market such subsequent order will 

not be considered a Directed Order but 

be treated as a regular order. The 

Trading Host will not send the order to 

the EP, but will immediately release it 

to the BOX Book as a regular order. If 

no GDO has been automatically 

generated, then such subsequent order 

will be sent to the EP and treated as a 

new Directed Order. 

Directed Order Exposure Period 

With this proposal the Exchange also 

wishes to add certain details in the rule 

regarding the treatment of Directed 

Orders that have been released to the 

BOX Book for exposure. If a GDO has 

been automatically generated and the 

Directed Order is not executable against 

the current NBBO, then the Trading 

Host will expose the order at the better 

GDO price for three (3) seconds. 

During the exposure period when the 

Directed Order is executable against the 

current NBBO, the EP must not 

decrement the size, worsen the price of 

his GDO or submit a contra order. 

Because the Trading Host has 

automatically created the GDO and 

shelved the EP’s quote, it will not 

process such changes to the GDO or 

pending quote, except a decrementation 

of the GDO size down to the size of the 

remaining Directed Order after 

execution with the BOX Book. The EP 

also may increase the size or better the 

price of his GDO. The EP may also 

modify his pending quote to be 

reestablished, but the Trading Host 

won’t apply such modifications until 

the quote is reestablished. 

Market Maker Quoting Obligations 

The Exchange proposes to add new 

Supplementary Material .02 to Chapter 

VI, Section 5, stating that such time 

without posting a quote when a Market 

Maker’s quote is shelved while acting as 

EP will not count towards fulfilling his 

obligations for purposes of the Market 

Maker’s quoting obligations under 

Chapter VI, Section 6(d) of the BOX 

Rules. 

Non-Substantive Changes 

The Exchange proposes to change 

several references to ‘Market Maker’ in 

the Directed Order rules to ‘EP’. The 

term ‘EP’ is first referenced in Chapter 

VI, Section 5(c)(i) as ‘‘a Market Maker 

who desires to accept Directed Orders 

* * * [by] * * * indicat[ing] that it is 

an Executing Participant (‘EP’).’’ This 

change is being made solely to provide 

greater clarity throughout the Directed 

Order rule and more closely aligns the 

rule text with the terminology used to 

describe the Directed Order process on 

BOX. In addition, the Exchange is 

adding the word ‘‘current’’ in the 

relevant instances of the use of the term 

NBBO in the Directed Order rules in 

order to clarify which NBBO is being 

referenced at a particular stage in the 

Directed Order process. Also, 

unnecessary and duplicative language 

about the function of the NBBO filter 

process pursuant to Chapter V, Section 

16(b) will be removed from Section 

5(c)(iii)(1). Finally, the proposal clarifies 

in Section 5(c)(iii)(2)(b)(4) that the 

Trading Host will reestablish the quote 

of the EP with a new time priority, 

decremented by any executed portion of 

the GDO or as modified by the EP. After 

Commission approval of the proposal, 

and at least one week prior to 

implementation of the rule change, 

BOXR will issue a regulatory circular to 

Participants. The regulatory circular 

will inform Participants of the 

implementation date. This will give 

Participants an opportunity to make any 

necessary modifications to coincide 

with the implementation date. 

2. Basis 

The Exchange believes that the 

proposal is consistent with the 

requirements of Section 6(b) of the Act,9

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

Act,10 in particular, in that it is designed 

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 for a free and open market 

and a national market system and, in 

general, to protect investors and the 

public interest. Specifically, under the 

proposal the BOX Trading Host will 

automate the creation of the GDO and 

the manner in which the quote of the EP 

is handled during the Directed Order 

process. 

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 

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 35 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 


pwalker on DSK8KYBLC1PROD with NOTICES
8418 Federal Register / Vol. 75, No. 36 / Wednesday, February 24, 2010 / Notices 

11 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(3). 

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

6The Stipulation can be found at (http:// 

www.cboe.org/Legal/pdf/ 

StipulationofSettlement.pdf). The Stipulation was 

amended on September 30, 2008 to change, among 

other things, an eligibility date to participate in the 

settlement. This first amendment can be found at 

(http://www.cboe.org/Legal/pdf/ 

AmendmenttoStipulationofSettlement.pdf). The 

Stipulation also was amended on October 6, 2008 

to change, among other things, the settlement 

period. This second amendment can be found at 

(http://www.cboe.org/Legal/pdf/ 

SecondAmendment.pdf). 

7CME Group Inc. et al. v. CBOE Inc. et al., Civil 

Action No. 2369–VCN (Filed Aug. 23, 2006). 

8CME Group Inc. et al. v. CBOE Inc. et al., Civil 

Action No. 2369–VCN (Memorandum Opinion 

dated June 3, 2009). This Opinion can be found at 

(http://www.cboe.org/Legal/pdf/ 

_0603134855_001.pdf). 

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 such 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, as amended, 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–2010–009 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–2010–009. 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–BX– 

2010–009 and should be submitted on 

or before March 17, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–3640 Filed 2–23–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–61530; File No. SR–CBOE– 

2010–014] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Relating to a Settlement 

Payment Obligation 

February 17, 2010. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 (‘‘Act’’ 

or ‘‘Exchange Act’’) 1 and Rule 19b–4 

thereunder,2 notice is hereby given that 

on February 3, 2010, the Chicago Board 

Options Exchange, Incorporated 

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

Securities and Exchange Commission 

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

rule change as described in Items I, II 

and III below, which Items have been 

prepared by the CBOE. CBOE has filed 

the proposal pursuant to Section 

19(b)(3)(A)(iii) of the Act 3 and Rule 

19b–4(f)(3) thereunder,4 which renders 

the proposal effective upon filing with 

the Commission. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested parties. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

CBOE is filing this proposed rule 

change with the Commission under 

Section 19(b) of the Act in connection 

with a matter that is concerned solely 

with the administration of the 

Exchange.5

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

CBOE 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 CBOE 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 agreed to make a 

Payment described below pursuant to 

the Stipulation of Settlement 

(‘‘Stipulation’’) into which the Exchange 

entered on August 20, 2008, with The 

Board of Trade of the City of Chicago, 

Inc. (‘‘Board of Trade’’ or ‘‘CBOT’’), its 

parent company CME Group, Inc. (‘‘CME 

Group’’), and a class of persons 

(collectively, the ‘‘CBOT Parties’’).6 The 

Stipulation resolves a lawsuit (‘‘CBOT 

Lawsuit’’) brought by the CBOT Parties 

against the Exchange and its Board of 

Directors (‘‘CBOE Board’’).7 The Court of 

Chancery of the State of Delaware (the 

‘‘Delaware Court’’) approved the 

Stipulation on June 3, 2009 in a 

Memorandum Opinion (‘‘Opinion’’) and 

entered its Order of Final Approval and 

Final Judgment on July 29, 2009.8 On 

December 2, 2009, the Delaware 

Supreme Court approved the dismissal 

of all appeals of the Order of Final 

Approval and Final Judgment. The 

dismissal constitutes the final judicial 

approval of the Stipulation. 

The Exchange is filing this proposed 

rule change in connection with its 

obligation to make the Payment 

pursuant to the Stipulation. The 


pwalker on DSK8KYBLC1PROD with NOTICES