Federal Register / Vol. 75, No. 37 / Thursday, February 25, 2010 / Notices 8763 

1 15 U.S.C. 78s(b)(3)(C). 

2Streaming Quote Traders, or ‘‘SQTs,’’ and 

Remote Streaming Quote Traders, or ‘‘RSQTs,’’ are 

Phlx market makers who may generate and submit 

option quotations electronically on the Phlx. RSQTs 

may only submit quotations from off the floor. 

3Phlx filed Amendment No. 1 to SR–Phlx–2009– 

116 on January 5, 2010 to correct a typographical 

error in the purpose section to make it consistent 

with the fee schedule provided in Exhibit 5 thereto. 

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

5 15 U.S.C. 78s(b)(3)(C). 

6 15 U.S.C. 78s(b)(1). 

7 Id. 

8 15 U.S.C. 78s(b)(2). 

9 15 U.S.C. 78f(b)(4). 

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

11 15 U.S.C. 78f(b)(8). 

12 15 U.S.C. 78s(b)(2). 

13 15 U.S.C. 78s(b)(3)(C). 

14 15 U.S.C. 78s(b)(1). 

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

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(6). 

Act of 1934 (‘‘Act’’),1 is summarily 

abrogating three proposed rule changes 

of NASDAQ OMX PHLX, Inc. (‘‘Phlx’’ or 

‘‘Exchange’’). 

On December 22, 2009, on December 

31, 2009, and on January 26, 2010, Phlx 

filed proposed rule changes to amend its 

fee schedule. In SR–Phlx–2009–104, 

Phlx proposed to amend its fee 

schedule, to among other things, assess 

a transaction fee of $0.05 per contract on 

Phlx specialists, Streaming Quote 

Traders (‘‘SQTs’’) and Remote Streaming 

Quote Traders (‘‘RSQTs’’) 2 for equity 

option orders directed to them by an 

order flow provider and executed 

electronically. A Phlx specialist, SQT, 

or RSQT would be assessed a 

transaction fee of $0.21 per contract 

when it trades with an order not 

directed to it. In SR–Phlx–2009–116, 

Phlx proposed to amend its fee schedule 

to adopt, for a two-month pilot period 

expiring March 2, 2010, a per contract 

transaction fee on market participants 

who remove liquidity from the 

Exchange in options on Standard & 

Poor’s Depositary Receipts/SPDRs 

(‘‘SPY’’) and a per contract rebate or 

transaction fee for market participants 

who add liquidity in SPY options.3 The 

amount of such transaction fees and 

rebates vary depending on the type of 

market participant. In SR–Phlx–2010– 

14, Phlx proposed to amend its fee 

schedule to apply, for a pilot period 

expiring March 2, 2010, the same per 

contract transaction fees and rebates 

Phlx adopted in SR–Phlx–2009–116 for 

transactions in options on SPY to 

transactions in options overlying the 

PowerShares QQQ Trust (‘‘QQQQ’’) ®, 

Ishares Russell 2000 (‘‘IWM’’), and 

Citigroup Inc. (‘‘C’’). 

The proposed rule changes were 

immediately effective upon filing with 

the Commission pursuant to Section 

19(b)(3)(A) of the Act.4 Pursuant to 

Section 19(b)(3)(C) of the Act,5 at any 

time within 60 days of the date of filing 

a proposed rule change pursuant to 

Section 19(b)(1) of the Act,6 the 

Commission may summarily abrogate 

the change in the rules of the selfregulatory organization and require that 

the proposed rule change be re-filed in 

accordance with the provisions of 

Section 19(b)(1) of the Act 7 and 

reviewed in accordance with Section 

19(b)(2) of the Act,8 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. 

The Commission is concerned about 

whether the proposals are consistent 

with the statutory requirements 

applicable to a national securities 

exchange under the Act, including, 

among other provisions, Section 6(b)(4) 

of the Act,9 which requires that the rules 

of a national securities exchange 

provide for the equitable allocation of 

reasonable dues, fees, and other charges 

among its members and issuers and 

other parties using its facilities; Section 

6(b)(5) of the Act,10 which requires, 

among other things, that the rules of a 

national securities exchange not be 

designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers; and Section 

6(b)(8) of the Act,11 which requires that 

the rules of a national securities 

exchange do not impose any burden on 

competition not necessary or 

appropriate in furtherance of the Act. 

Accordingly, the Commission believes 

that the procedures provided by Section 

19(b)(2) of the Act 12 will provide a more 

appropriate mechanism for determining 

whether the proposed rule changes are 

consistent with the Act. Therefore, the 

Commission finds that it is appropriate 

in the public interest, for the protection 

of investors, and otherwise in 

furtherance of the purposes of the Act, 

to abrogate the proposed rule changes. 

It is therefore ordered, pursuant to 

Section 19(b)(3)(C) of the Act,13 that File 

Nos. SR–Phlx–2009–104, SR–Phlx– 

2009–116, as modified by Amendment 

No. 1, and SR–Phlx–2010–14, be and 

hereby are, summarily abrogated. If Phlx 

chooses to re-file the proposed rule 

changes, it must do so pursuant to 

Sections 19(b)(1) 14 and 19(b)(2) of the 

Act.15

By the Commission. 

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2010–3791 Filed 2–24–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–61536; File No. SR–BX– 

2010–014] 

Self-Regulatory Organizations; 

NASDAQ OMX BX, Inc.; Notice of Filing 

and Immediate Effectiveness of 

Proposed Rule Change Relating to 

Order Routing on the Boston Options 

Exchange Facility 

February 18, 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 February 

8, 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 the 

proposed rule change pursuant to 

Section 19(b)(3)(A) of the Act,3 and Rule 

19b–4(f)(6) 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 persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

NASDAQ OMX BX, Inc. (the 

‘‘Exchange’’) proposes to amend Chapter 

XII, Section 5 (Order Routing to Away 

Exchanges) of the Rules of the Boston 

Options Exchange Group, LLC (‘‘BOX’’) 

to make the Order Routing Pilot 

Permanent. The text of the proposed 

rule change is available from the 

principal office of the Exchange, on the 

Commission’s Web site at http:// 

www.sec.gov and also on the Exchange’s 

Internet Web site at http:// 

nasdaqomxbx.cchwallstreet.com/ 

NASDAQOMXBX/Filings/. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

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 


jlentini on DSKJ8SOYB1PROD with NOTICES
8764 Federal Register / Vol. 75, No. 37 / Thursday, February 25, 2010 / Notices 

5See Securities Exchange Act Release No. 60832 

(October 16, 2009), 74 FR 54607 (October 22, 2009) 

(SR–BX–2009–066)(Notice of Filing and Order 

Granting Accelerated Approval of Proposed Rule 

Change Relating to Chapter XII of the BOX Rules) 

(‘‘Approval Order’’). See also Chapter XII, Section 5 

of the BOX Rules. Chapter XII, Section 5 is 

consistent with rules approved for other national 

securities exchanges. See e.g. Approval Order at 

54609, note 24. Terms not otherwise defined herein 

shall have the meaning proscribed in the BOX 

Rules. 

6See Securities Exchange Act Release No. 60405 

(July 30, 2009), 74 FR 39362 (August 6, 2009) (File 

No. 4–546) (Order Approving the National Market 

System Plan Relating to Options Order Protection 

and Locked/Crossed Market Plan). 

7The Exchange requested accelerated approval to 

allow BOX to establish and implement mechanisms 

to remain fully compliant with the Decentralized 

Plan and BOX Rules and to no longer rely upon a 

Commission-granted exemption from Rule 608(c) of 

Regulations NMS. The pilot period also allowed 

interested parties an opportunity to comment on the 

proposal before it was permanently approved. 

8See Supra note 5. 

9See Securities Exchange Act Release No. 61399 

(January 22, 2010), 75 FR 4603 (January 28, 2010) 

(SR–BX–2010–007) (Notice of Filing and Immediate 

Effectiveness of Proposed Rule Change Relating to 

the Order Routing Pilot on the Boston Options 

Exchange Facility). 

10See Supra note 5. 

11 15 U.S.C. 78f(b). 

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

13 15 U.S.C. 78s(b)(3)(A). 

14 17 CFR 240.19b–4(f)(6). In addition, as required 

under Rule 19b–4(f)(6)(iii), the Exchange has 

submitted to the Commission written notice of its 

intent to file the proposed rule change, along with 

a brief description and the 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. 

15See Supra note 5 and note 9. 

16See Supra note 5. 

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 remove Supplementary 

Material .03 to Chapter XII, Section 5, to 

make the rules governing the outbound 

order routing process permanent. On 

October 16, 2009 the Commission 

approved 5 the Exchange’s proposal to 

amend Chapter XII of the BOX Rules to 

provide for the use by BOX of certain 

non-affiliated third party routing broker/ 

dealers (‘‘Routing Broker(s)’’) to route 

options orders to one or more Away 

Exchange(s) when such Away 

Exchange(s) display the Best Bid or Best 

Offer in accordance with the Options 

Order Protection and Locked/Crossed 

Market Plan (‘‘Decentralized Plan’’).6

The Exchange requested that the 

proposal be approved on a pilot basis 

for three (3) months starting from the 

date of the approval of submission of 

filing. The Commission approved the 

Exchange’s proposal on an accelerated 

basis 7 for a pilot period to expire on 

January 15, 2010.8 On January 15, 2010, 

the effective date of the Order Routing 

Pilot was extended until March 15, 

2010.9 The Exchange believes 

permanent approval is appropriate. 

There have been no comments, or 

complaints pertaining to the Order 

Routing Pilot. The routing process is 

operating as intended. Moreover, as 

previously noted, Chapter XII, Section 5 

is consistent with rules approved for 

other national securities exchanges.10

2. Statutory Basis 

The Exchange believes that the 

proposal is consistent with the 

requirements of Section 6(b) of the 

Act,11 in general, and Section 6(b)(5) of 

the Act,12 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. In particular, the 

Exchange believes that permanent 

approval of the Order Routing Pilot will 

result in an ongoing benefit to investors 

by affording BOX Options Participants 

the choice, on a voluntary basis, to have 

their orders routed to one or more Away 

Exchange(s) when such Away 

Exchange(s) display the Best Bid or Best 

Offer, in accordance with the 

Decentralized Plan. 

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 

This proposed rule change is filed 

pursuant to paragraph (A) of section 

19(b)(3) of the Exchange Act 13 and Rule 

19b–4(f)(6) thereunder.14 This proposed 

rule change does not significantly affect 

the protection of investors or the public 

interest, does not impose any significant 

burden on competition, and, by its 

terms, does not become operative for 30 

days after the date of the filing, or such 

shorter time as the Commission may 

designate if consistent with the 

protection of investors and the public 

interest. The Exchange believes that this 

proposed rule change, which is essential 

for competitive purposes and to 

promote a free and open market for the 

benefit of investors, does not raise any 

new, unique or substantive issues from 

those raised in the Exchanges initial 

proposal to implement the Order 

Routing Pilot or the recent extension 

tothe Pilot,15 and the rules are 

consistent with those of other 

exchanges.16 The Exchange believes 

permanent approval is appropriate. 

There have been no comments, or 

complaints pertaining to the Order 

Routing Pilot. The routing process is 

operating as intended. 

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission may summarily abrogate 

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–BX–2010–014 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–2010–014. 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 


jlentini on DSKJ8SOYB1PROD with NOTICES
Federal Register / Vol. 75, No. 37 / Thursday, February 25, 2010 / Notices 8765 

17 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3PHLX Semiconductor SectorSM may also be 

known as PHLX Semiconductor Index or PHLX 

Semiconductor SectorSM Index. 

4The contract specifications for SOX options are 

available at http://www.nasdaqtrader.com/ 

micro.aspx?id=phlxsectorscontractspecs#SOX. 

5A narrow-based index or industry index is 

defined as: An index designed to be representative 

of a particular industry or a group of related 

industries. The term ‘‘narrow-based index’’ includes 

indices the constituents of which are all 

headquartered within a single country. See Rule 

1000A(b)(12). 

6A broad-based index or market index is defined 

as: An index designed to be representative of a 

stock market as a whole or of a range of companies 

in unrelated industries. See Rule 1000A(b)(11). 

7Rule 1009A establishes generic listing standards 

for options on narrow-based and broad-based 

indexes pursuant to Rule 19b–4(e) of the Act. See 

Securities Exchange Act Release No. 40761 

(December 8, 1998), 63 FR 70952 (December 22, 

1998). The listing standards in Rule 1009A are 

similar to those of other options exchanges such as, 

for example, Chicago Board Options Exchange, 

Incorporated; International Stock Exchange LLC; 

and The NASDAQ Stock Market LLC. 

8See Securities Exchange Act Release No. 34546 

(August 18, 1994), 59 FR 43881 (August 25, 1994) 

(SR–Phlx–94–02) (order approving proposal to list 

and trade the SOX index). 

9Other sector indexes on which options are listed 

and traded on the Exchange include: KBW Bank 

IndexSM (BKXSM); PHLX Gold/Silver SectorSM

(XAUSM); PHLX Housing SectorSM (HGXSM); PHLX 

Oil Service SectorSM (OSXSM); PHLX Utility 

SectorSM (UTYSM); NASDAQ OMX China IndexSM

(CNZSM); SIG Energy MLP IndexSM (SVOTM); and 

SIG Oil Exploration & Production IndexTM (EPXSM). 

10Other currently available investment products 

that evaluate the semiconductor market, albeit 

differently from SOX, include Semiconductor 

HOLDRs (SMH) and iShares S&P North American 

Technology-Semiconductors Index Fund (IGW). 

11 During 2009, SOX has traded an average of 

29,127 contracts per month and has traded as much 

as 23,339 contracts in a day (June 16, 2009). As of 

December 31, 2009, there were 11,976 contracts of 

open interest in SOX. 

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 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–2010–014 and should 

be submitted on or before March 18, 

2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–3774 Filed 2–24–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–61539; File No. SR–Phlx– 

2010–20] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX, Inc.; Notice of 

Filing of Proposed Rule Change To 

Expand the Number of Components in 

the PHLX Semiconductor SectorSM

Known as SOXSM, on Which Options 

Are Listed and Traded 

February 18, 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 February 

2, 2010, NASDAQ OMX PHLX, Inc. 

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

Securities and Exchange Commission 

(the ‘‘Commission’’) the proposed rule 

change 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 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 proposal to expand the 

number of components in the PHLX 

Semiconductor SectorSM known as 

SOXSM, on which options are listed and 

traded.3 No other changes are made to 

the index or options on the index. 

A copy of the filing is available on the 

Exchange’s Web site at http:// 

nasdaqomxphlx.cchwallstreet.com/ 

NASDAQOMXPHLX/Filings/, 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 proposal is to 

expand the number of components in 

the PHLX Semiconductor SectorSM

known as SOXSM (‘‘SOX’’ or the 

‘‘Index’’), on which options are listed 

and traded. 

SOX options subsequent to this 

proposal will be identical to SOX 

options that are currently listed and 

trading except for the number of 

components in the underlying Index, 

and will trade pursuant to the same 

(unchanged) contract specifications.4

The singular post-proposal difference in 

SOX options is that they will overlie an 

Index with thirty components where the 

current Index has twenty-one 

components. 

Background 

The Exchange currently has initial 

listing and maintenance listing 

standards for options on indexes in Rule 

1009A that are designed to allow the 

Exchange to list options on narrowbased indexes 5 and broad-based 

indexes 6 pursuant to generic listing 

standards (the ‘‘Index Listing 

Standards’’).7 SOX is a narrow-based 

index and SOX options overlying the 

Index are listed and traded pursuant to 

Rule 1009A(b). SOX options were 

originally listed and began trading in 

1994 pursuant to Exchange approval.8

SOX is a modified market 

capitalization-weighted index composed 

of twenty-one companies primarily 

involved in the design, distribution, 

manufacture, and sale of 

semiconductors, and is one of several 

narrow-based sector indexes on which 

options are listed and traded on the 

Exchange.9 SOX provides exposure to 

the fast-growing (yet extremely volatile) 

semiconductor industry. When 

investors want information and 

investment opportunities specific to 

semiconductors, they look most often to 

the SOX index.10 Indeed, the popularity 

of SOX is reflected in the trading 

volumes of options on the Index.11 It 


jlentini on DSKJ8SOYB1PROD with NOTICES