Federal Register / Vol. 75, No. 45 / Tuesday, March 9, 2010 / Notices 10853 

20 15 U.S.C. 78f(b). 

21 15 U.S.C. 78f(b)(5). 

22 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)(6). 

holders that are competing with Broker/ 

Dealers in the NYSE Amex marketplace. 

In addition, basing the standard on the 

number of orders that are entered in 

listed options for a beneficial account(s) 

assures that Professional Customer 

account holders cannot inappropriately 

avoid the purpose of the rule by 

spreading their trading activity over 

multiple exchanges, and using an 

average number over a calendar month 

will prevent gaming of the 390 order 

threshold. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,20 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,21

in particular, in that it is designed to 

prevent fraudulent and manipulative 

acts and practices, 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. In particular, the 

proposal will assure that retail investors 

continue to receive the appropriate 

marketplace advantages in NYSE Amex 

marketplace, while furthering fair 

competition among marketplace 

professionals by treating them equally 

within the NYSE Amex marketplace. 

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 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 

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 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–NYSEAmex–2010–18 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–NYSEAmex–2010–18. 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 the filing will 

also be available for inspection and 

copying at NYSE‘s principal office and 

on its Internet Web site at http:// 

www.nyse.com. 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– 

NYSEAmex–2010–18 and should be 

submitted on or before March 30, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.22

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–4909 Filed 3–8–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–61628; File No. SR–CBOE– 

2010–019] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Related to Multi-Class 

Broad Based Index Option Spread 

Orders 

March 2, 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 

18, 2010, the Chicago Board Options 

Exchange, Incorporated (‘‘Exchange’’ or 

‘‘CBOE’’) 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 Exchange. 

The Exchange filed the proposal as a 

‘‘non-controversial’’ proposed rule 

change pursuant to Section 

19(b)(3)(A)(iii) of the Act3 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 

The Exchange is proposing to amend 

its rule related to multi-class broadbased index option spreads to include 

options on index-linked securities (also 

known as exchange-traded notes 

(‘‘ETNs’’)) within the definition of an 

eligible ‘‘broad-based index option.’’ The 

text of the proposed rule change is 

available on the Exchange’s Web site 

(http://www.cboe.org/Legal), at the 

Exchange’s Office of the Secretary and 

at the Commission. 


sroberts on DSKD5P82C1PROD with NOTICES
10854 Federal Register / Vol. 75, No. 45 / Tuesday, March 9, 2010 / Notices 

5See e.g., Securities Exchange Act Release Nos. 

58204 (July 22, 2008), 73 FR 43807 (July 28, 2008) 

(approving SR–CBOE–2008–64); 58203 (July 22, 

2008), 73 FR 43812 (July 28, 2008) (approving SR– 

NYSEArca–2008–57); 58985 (November 10, 2008), 

73 FR 72538 (November 28, 2008) (approving SR– 

ISE–2008–86). 

6OCC previously received Commission approval 

to clear options based on Index-Linked Securities. 

See Securities Exchange Act Release No. 60872 

(October 23, 2009), 74 FR 55878 (October 29, 2009) 

(SR–OCC–2009–14). 

7Rule 24.19 sets for a procedure for trading multiclass spread orders for eligible broad-based index 

option classes. For purposes of Rule 24.19 only, the 

term ‘‘broad-based index option’’ means ‘‘(i) options 

on the Mini-NDX Index (MNX), Nasdaq-100 Index 

(NDX), S&P 100 Index (OEX and XEO), iShares S&P 

100 Index Fund (OEF), Nasdaq-100 Tracking Stock 

(QQQ), and S&P 500 Index (SPX); and (ii) any other 

broad-based index option or option on exchangetraded fund shares derived from a broad-based 

index that is determined by the Exchange to create 

an appropriate hedge with any other Broad-Based 

Index Option under this Rule 24.19.’’ See Rule 

24.19(a)(1). 

8The Exchange is also proposing a nonsubstantive change to the text of Rule 24.19(a)(1) to 

include a cross-reference to Units (another term for 

ETFs), which is defined under Interpretation and 

Policy .06 to CBOE Rule 5.3. 

9 Id. 

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

11 15 U.S.C. 78s(b)(3)(A). 

12 17 CFR 240.19b–4(f)(6). 

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 Commission has approved 

CBOE’s and other option exchanges’ 

proposals to enable the listing and 

trading of options on ETNs.5 Options 

trading has not commenced to date and 

is contingent upon the Commission’s 

approval of The Options Clearing 

Corporation’s (‘‘OCC’’) proposed 

supplement to the Options Disclosure 

Document (‘‘ODD’’) that will provide 

disclosure regarding options on indexlinked securities.6

Prior to the commencement of trading 

options on ETNs, the Exchange is 

proposing to amend CBOE Rule 24.19, 

Multi-Class Broad-Based Index Option 

Spread Orders, to include options on 

ETNs within the definition of an eligible 

‘‘broad-based index option’’ that may be 

subject to the multi-class spread trading 

procedures outlined in Rule 24.19.7

Specifically, the definition of an eligible 

broad-based index option for purposes 

of Rule 24.19 will be amended to 

include an option on an ETN derived 

from a broad-based index that is 

determined by the Exchange to create an 

appropriate hedge with any other broadbased index option under Rule 24.19. 

This change to include ETNs is the same 

as an existing provision in the rule that 

provides that options on Units (also 

known as exchange-traded funds 

(‘‘ETFs’’)) that are derived from broadbased indices that are determined by the 

Exchange to create an appropriate hedge 

with any other broad-based index 

option may be subject to the multi-class 

spread trading procedures.8

Without discounting the differences 

between ETFs and ETNs, the Exchange 

seeks to extend the trading conventions 

applicable to options on ETFs to options 

on ETNs. CBOE contends that the 

inclusion of options on ETNs within the 

broad-based index option definition for 

purposes of the multi-class broad-based 

index option spread trading procedures 

is consistent with what is currently 

permitted for options on ETFs.9

2. Statutory Basis 

The basis under the Act for this 

proposed rule change is the requirement 

under Section 6(b)(5)10 that an exchange 

have rules that are designed to promote 

just and equitable principles of trade, 

and 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 proposed rule change 

seeks to extend the application of the 

multi-class broad-based index option 

spread trading procedures under CBOE 

Rule 24.19 to ETNs in a manner that is 

consistent with what is currently 

permitted for ETFs. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

CBOE 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 neither solicited nor 

received comments on the proposal. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing rule does not (i) 

significantly affect the protection of 

investors or the public interest; (ii) 

impose any significant burden on 

competition; and (iii) 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, provided that the selfregulatory organization has given the 

Commission written notice of its intent 

to file 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 proposed rule change 

has become effective pursuant to 

Section 19(b)(3)(A) of the Act 11 and 

Rule 19b–4(f)(6) thereunder.12 At any 

time within 60 days of the filing of such 

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–CBOE–2010–019 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–CBOE–2010–019. 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/ 


sroberts on DSKD5P82C1PROD with NOTICES
Federal Register / Vol. 75, No. 45 / Tuesday, March 9, 2010 / Notices 10855 

13 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4See Securities Exchange [sic] Release No. 59965 

(May 21, 2009), 74 FR 25783 (May 29, 2009) (SR– 

NYSE–2009–25). 

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–CBOE– 

2010–019 and should be submitted on 

or before March 30, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–4910 Filed 3–8–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–61626; File No. SR–NYSE– 

2010–07] 

Self-Regulatory Organizations; New 

York Stock Exchange, LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Amending 

NYSE Rule 476 To Add a Provision for 

Violations Relating to Failing To 

Observe High Standards of 

Commercial Honor and Just and 

Equitable Principles of Trade 

March 2, 2010. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on February 

5, 2010, New York Stock Exchange LLC 

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

the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I and II 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 amend 

NYSE Rule 476 to add a provision for 

violations relating to failing to observe 

high standards of commercial honor and 

just and equitable principles of trade. 

The text of the proposed rule change is 

available at the Exchange, the 

Commission’s Public Reference Room, 

and http://www.nyse.com. 

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 

In this filing, the New York Stock 

Exchange LLC (‘‘NYSE’’ or the 

‘‘Exchange’’) proposes to amend Rule 

476 to add a provision for violations 

relating to failing to observe high 

standards of commercial honor and just 

and equitable principles of trade. The 

Commission previously approved an 

amendment to NYSE Rule 476 to delete 

subsection (a)(6), which concerned just 

and equitable principles of trade.4 The 

rationale for that deletion was because 

NYSE adopted Rule 2010, which 

provided for the same content as the 

prior version of Rule 476(a)(6) and 

which harmonized the Exchange rule 

with the NYSE Amex LLC (‘‘NYSE 

Amex’’) and Financial Industry 

Regulatory Authority, Inc. (‘‘FINRA’’) 

standards for just and equitable 

principles of trade. 

However, in deleting Rule 476(a)(6) 

and replacing it with Rule 2010, the 

Exchange inadvertently deleted the 

ability for the Exchange to bring charges 

relating to failing to observe high 

standards of commercial honor and just 

and equitable principles of trade against 

approved persons, principal executives, 

and employees of member 

organizations. As approved, NYSE Rule 

2010 is applicable only to members and 

member organizations. Accordingly, the 

Exchange proposes to amend Rule 476, 

which has an enabling provision to 

bring charges against approved persons 

and employees of member 

organizations, to add subsection (a)(6) to 

cover the same content that was 

previously deleted. To ensure that the 

standards for just and equitable 

principles of trade are consistent across 

Exchange rules, NYSE Amex, and 

FINRA, the Exchange proposes to adopt 

rule text that mirrors the standard set 

forth in Rule 2010, which is virtually 

identical to NYSE Amex Equities Rule 

2010 and FINRA Rule 2010. As 

proposed, NYSE Rule 476(a)(6) would 

read as follows: ‘‘failing to observe high 

standards of commercial honor and just 

and equitable principles of trade.’’ 

In adopting this revised rule text for 

Rule 476(a)(6), the Exchange would be 

able to bring a charge relating to failing 

to observe high standards of commercial 

honor and just and equitable principles 

of trade against not only members and 

member organizations, but also against 

principal executives, approved persons, 

and employees of member 

organizations. This proposal is 

consistent with FINRA Rule 2010 

because under FINRA Rule 0140, 

persons associated with a FINRA 

member have the same duties and 

obligations as a member under FINRA 

rules. Accordingly, FINRA has the 

authority to charge an associated person 

with a violation of Rule 2010. By adding 

this standard to Rule 476(a)(6), the 

Exchange will similarly have the 

authority to charge an employee of a 

member organization with a violation 

relating to failing to observe high 

standards of commercial honor and just 

and equitable principles of trade. 

To ensure full harmonization, the 

Exchange also proposes amending Rule 

476(a)(5) and deleting the phrase ‘‘fraud 

or fraudulent acts’’ and replacing it with 

the rule text from Rule 2020 to provide 

that the Exchange can bring charges 

against an employee of a member 

organization for effecting any 

transaction in, or inducing the purchase 

or sale of, any security by means of any 

manipulative, deceptive or other 

fraudulent device or contrivance. 

Finally, the Exchange proposes 

deleting the reference to ‘‘allied 

member,’’ which no longer is a category 


sroberts on DSKD5P82C1PROD with NOTICES