Federal Register / Vol. 75, No. 42 / Thursday, March 4, 2010 / Notices 9989 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release Nos. 60405 

(July 20, 2009) (National Market System Plan 

Relating to Options Order Protection and Locked/ 

Crossed Markets). The Plan is a national market 

system plan proposed by the seven existing options 

exchanges and approved by the Commission. See 

Securities Exchange Act Release No. 59647 (March 

30, 2009), 74 FR 15010 (April 2, 2009) (File No. 4– 

546) (‘‘Plan Notice’’) and 60405 (July 30, 2009), 74 

FR 39362 (August 6, 2009) (File No. 4–546) (‘‘Plan 

Approval’’). The seven options exchanges are: 

Chicago Board Options Exchange, Incorporated 

(‘‘CBOE’’); International Securities Exchange LLC 

(‘‘ISE’’); NASDAQ OMX BX, Inc. (‘‘BOX’’); The 

NASDAQ Stock Market LLC (‘‘Nasdaq’’); NYSE 

Amex LLC (‘‘NYSE Amex’’); NYSE Arca, Inc. 

(‘‘NYSE Arca’’); and Phlx (each exchange 

individually a ‘‘Participant’’ and, together, the 

‘‘Participating Options Exchanges’’). 

4See Securities Exchange Act Release No. 60363 

(July 22, 2009), 74 FR 37270 (July 28, 2009) (SR– 

Phlx–2009–61). Linkage was governed by the 

Options Linkage Authority under the conditions set 

forth under the Plan for the Purpose of Creating and 

Operating an Intermarket Option Linkage approved 

by the Commission. The registered U.S. options 

markets are linked together on a real-time basis 

through a network capable of transporting orders 

and messages to and from each market. 

5See Securities Exchange Act Release No. 60363 

(July 22, 2009), 74 FR 37270 (July 28, 2009) (SR– 

Phlx–2009–61). Linkage was governed by the 

Options Linkage Authority under the conditions set 

forth under the Plan for the Purpose of Creating and 

Operating an Intermarket Option Linkage approved 

by the Commission. The registered U.S. options 

markets are linked together on a real-time basis 

through a network capable of transporting orders 

and messages to and from each market. 

6See footnote 5. 

7See footnote 5. 

8See footnote 3. 

9See Exchange Rule 1080(m). 

10See Securities and Exchange Act Release No. 

60550 (August 20, 2009), 74 FR 44430 (August 28, 

2009) (SR–Phlx–2009–61). 

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

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

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–61583; File No. SR–Phlx– 

2010–23] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX, Inc.; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to 

Intermarket Linkage Rules 

February 25, 2010. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 1 and Rule 19b–4 thereunder,2

notice is hereby given that, on February 

19, 2010, NASDAQ OMX PHLX, Inc. 

(‘‘Phlx’’ or the ‘‘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 self-regulatory 

organization. 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 proposes to eliminate 

Exchange Rule 1088, Phase Out of 

Intermarket Linkage Rules. 

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 those 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 parts 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 eliminate Exchange Rule 

1088, a temporary rule titled Phase Out 

of Intermarket Linkage Rules because 

this rule is no longer necessary. 

On June 17, 2008, the Exchange filed 

the Options Order Protection and 

Locked/Crossed Market Plan (‘‘Plan’’), 

joining all other approved options 

markets in adopting the Plan.3 The Plan 

requires each options exchange to adopt 

rules implementing various 

requirements specified in the Plan.4 The 

Plan replaces the former Plan for the 

Purpose of Creating and Operating an 

Intermarket Linkage (‘‘Linkage Plan’’).5

The Linkage Plan required Participating 

Options Exchanges to operate a standalone system or ‘‘Linkage’’ for sending 

order-flow between exchanges to limit 

trade-throughs.6 The Options Clearing 

Corporation (‘‘OCC’’) operated the 

Linkage system (the ‘‘System’’).7 The 

Exchange adopted various new rules in 

connection with the Plan to avoid tradethroughs and locked markets, among 

other things.8 The Exchange currently 

offers private routing directly to away 

markets.9

The Exchange adopted Exchange 

Temporary Rule 1088 in order to 

facilitate the participation of certain 

Participating Options Exchanges who 

may require the use of P/A Orders and 

Principal Orders after implementation 

of the Plan.10 Certain Participating 

Options Exchanges required a 

temporary transition period during 

which they continued to utilize these 

order types that existed under the 

Linkage Plan. The Exchange proposed 

substantially similar rules with that of 

the other Participating Options 

Exchanges to accommodate the 

possibility of continued use of P/A 

Orders and Principal Orders. At this 

time all Participating Options 

Exchanges have discontinued use of the 

Linkage Plan. The Exchange proposes at 

this time to delete Temporary Rule 1088 

because it is no longer necessary in light 

of the discontinued use of the Linkage 

Plan. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act 11 in general, and furthers the 

objectives of Section 6(b)(5) of the Act 12

in particular, in that it is designed to 

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, by 

proposing the elimination of Temporary 

Rule 1088, which reflects usage of a 

former Linkage Plan that has since been 

replaced by a new 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 

No written comments were either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change: (i) Does not significantly affect 

the protection of investors or the public 

interest; (ii) does not impose any 

significant burden on competition; and 

(iii) by its terms, does not 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 

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9990 Federal Register / Vol. 75, No. 42 / Thursday, March 4, 2010 / Notices 

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

14 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires the self-regulatory organization 

to submit to 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 

Exchange has satisfied this requirement. 

15The text of the proposed rule change is 

available on Phlx’s Web site at http:// 

www.nasdaqtrader.com, on the Commission’s Web 

site at http://www.sec.gov, and at the Commission’s 

Public Reference Room. 

16 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 In the event a party to a transaction requests that 

NASDAQ review a transaction, the NASDAQ officer 

nonetheless would need to determine, on his or her 

own motion, whether to review the transaction. 

19(b)(3)(A) of the Act 13 and Rule 19b– 

4(f)(6) thereunder.14

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–Phlx–2010–23 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–2010–23. 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 on official business 

days between the hours of 10 a.m. and 

3 p.m.15 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–2010–23 and should 

be submitted on or before March 25, 

2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–4454 Filed 3–3–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–61573; File No. SR– 

NASDAQ–2010–022] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by NASDAQ 

Stock Market, LLC. Inc. Relating To 

Amending NASDAQ Options Market 

(‘‘NOM’’) Chapter V, Section 6, Obvious 

Errors 

February 23, 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 

18, 2010, The NASDAQ Stock Market 

LLC (‘‘NASDAQ’’) 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 NASDAQ. 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 proposes to amend 

NASDAQ Options Market (‘‘NOM’’) Rule 

Chapter V, Section 6, Obvious Errors, to 

adopt the ability to review transactions 

on NASDAQ’s own motion. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http:// 

www.nasdaq.cchwallstreet.com, 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, 

NASDAQ included statements 

concerning the purpose of and basis for 

the proposed rule change. The text of 

these statements may be examined at 

the places specified in Item IV below. 

NASDAQ 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 amend NOM Chapter V, 

Section 6 pertaining to the nullification 

and adjustment of options transactions. 

Specifically, NASDAQ proposes to 

adopt a provision which provides that 

in the interest of maintaining a fair and 

orderly market and for the protection of 

investors, the Chief Regulatory Officer 

of NASDAQ or his/her designee who is 

an officer (collectively ‘‘NASDAQ 

officer’’), may, on his or her own motion 

or upon request, determine to review 

any transaction occurring on NASDAQ 

that is believed to be erroneous.3 A 

transaction reviewed pursuant to this 

provision may be nullified or adjusted 

only if it is determined by the NASDAQ 

officer that the transaction is an obvious 

error as provided in Chapter V, Section 

6. A transaction would be adjusted or 

nullified in accordance with the 

provision under which it is deemed an 

erroneous transaction. The NASDAQ 

officer may be assisted by a designated 

employee in NASDAQ Regulation that 

is trained in the application of this rule 

for reviewing a transaction(s). 

The NASDAQ officer shall act 

pursuant to this paragraph as soon as 

possible after receiving notification of 

the transaction, and ordinarily would be 

expected to act on the same day as the 

transaction occurred. However, because 

a transaction under review may have 

occurred near the close of trading or due 

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