Federal Register / Vol. 74, No. 146 / Friday, July 31, 2009 / Notices 38247 

8 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 17 CFR 240.19b–4(f)(6). 

participate in the same transactions. Is 

widening the differential in this manner 

equitable as that term is used in Section 

6(b)(4) of the Act? At what point would 

the differential become so large as to be 

inequitable? 

4. Does it impose a burden on 

competition not necessary or 

appropriate in furtherance of the 

purposes of the Act and prohibited 

under Section 6(b)(4) of the Act to 

charge firms facilitating a customer 

order no fees and charge other noncustomer members? If so, please explain 

how. 

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–2009–38 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-2009–38. 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 inspection and copying 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 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–NYSEAmex–2009–38 and 

should be submitted on or before 

August 21, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.8

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–18271 Filed 7–30–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60384; File No. SR– 

NASDAQ–2009–071] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change to Modify Its 

Optional Anti-Internalization 

Functionality 

July 24, 2009. 

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 July 22, 

2009, The NASDAQ Stock Market LLC 

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

the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by the Exchange. The 

Exchange has designated the proposed 

rule change as effecting a change 

described under Rule 19b–4(f)(6) under 

the Act,3 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 filing with the 

Commission a proposed rule change to 

modify its optional anti-internalization 

functionality. 

The text of the proposed rule change 

is below. Proposed new language is 

underlined and proposed deletions are 

in brackets. 

* * * * * 

4757. Book Processing 

(a) System orders shall be executed 

through the Nasdaq Book Process set 

forth below: 

(1)–(3) No Change. 

(4) Exception: Anti-Internalization— 

Market participants may direct that 

quotes/orders entered into the System 

not execute against quotes/orders 

entered under the same MPID. [In such 

a case, the later entered of the quote/ 

orders will be cancelled back to the 

entering party.] In such a case, if the 

interacting orders from the same MPID 

are equivalent in size, both orders will 

be cancelled back to their entering 

parties. If the interacting orders from the 

same MPID are not equivalent in size, 

share amounts equal to size of the 

smaller of the two orders will be 

cancelled back to their originating 

parties with the remainder of the larger 

order being retained by the System for 

potential execution. 

* * * * * 

(b) and (c) Not applicable. [sic] 

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 

Nasdaq is proposing to modify its 

voluntary anti-internalization 

functionality. Under the proposal, 

market participants entering quotes/ 

orders under a specific market 

participant identifier (‘‘MPID’’) may 

voluntarily direct that they not execute 

against other quotes/orders entered into 

the System under the same MPID. In 

such a case, if the orders from the same 

MPID are equivalent in size, both orders 

will be cancelled back to their entering 

parties. If the orders from the same 

MPID are not equivalent in size, share 

amounts equal to [sic] size of the 

smaller of the two orders will be 

cancelled back to their respective 

originating parties with the remainder of 

the larger order being retained by the 

System for potential execution. 

The above replaces Nasdaq’s currently 

approved, but not yet operational, antiinternalization functionality that would 


PWALKER on DSK8KYBLC1PROD with NOTICES
38248 Federal Register / Vol. 74, No. 146 / Friday, July 31, 2009 / Notices 

4See SR–BATS–2009–022 and SR–NYSEArca– 

2009–058. Nasdaq’s proposed anti-internalization 

functionality is similar to BAT’s MMTP Decrement 

and Cancel and NYSE Arca’s STP Decrement and 

Cancel. 

5 15 U.S.C. 78f. 

6 15 U.S.C. 78f(b)(5). 

7See SR–BATS–2009–022 and SR–NYSEArca– 

2009–058. 

8 15 U.S.C. 78s(b)(3)(A). 

9 17 CFR 240.19b–4(f)(6). 

10For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

and capital formation. See 15 U.S.C. 78c(f). 

11The Commission is also waiving the five 

business-day pre-filing requirement. 

12See BATS Exchange Rule 11.9(f) and NYSE 

Arca Equities Rule 7.31(qq). 

cancel the later entered of interacting 

orders from the same MPID. Nasdaq is 

modifying its anti-internalization 

functionality based on additional input 

from system users as well as the 

Commission’s recent approval of 

various versions of anti-internalization 

functionality for the BATS and NYSE 

Arca exchanges.4

Anti-internalization functionality is 

designed to assist market participants in 

complying with certain rules and 

regulations of the Employee Retirement 

Income Security Act (‘‘ERISA’’) that 

preclude and/or limit managing brokerdealers of such accounts from trading as 

principal with orders generated for 

those accounts. It can also assist market 

participants in reducing execution fees 

potentially resulting from the 

interaction of executable buy and sell 

trading interest from the same firm. 

Nasdaq notes that use of the 

functionality does not relieve or 

otherwise modify the duty of best 

execution owed to orders received from 

public customers. As such, market 

participants using anti-internalization 

functionality will need to take 

appropriate steps to ensure that public 

customer orders that do not execute 

because of the use of anti-internalization 

functionality ultimately receive the 

same execution price (or better) they 

would have originally obtained if 

execution of the order was not inhibited 

by the functionality. 

2. Statutory Basis 

Nasdaq believes that the proposed 

rule change is consistent with the 

provisions of Section 6 of the Act,5 in 

general, and with Sections [sic] 6(b)(5) 

of the Act,6 in particular, in that the 

proposal 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 regulating, clearing, settling, 

processing information with respect to, 

and facilitating transactions in 

securities, 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. 

Nasdaq notes that similar functionality 

has previously [sic] approved for other 

markets.7

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will result in 

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 

Written comments on the proposed 

rule change were neither solicited nor 

received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change: (1) Does not significantly affect 

the protection of investors or the public 

interest; (2) does not impose any 

significant burden on competition; and 

(3) by its terms does not become 

operative for 30 days after the date of 

this filing, or such shorter time as the 

Commission may designate if consistent 

with the protection of investors and the 

public interest, the proposed rule 

change has become effective pursuant to 

Section 19(b)(3)(A) of the Act 8 and Rule 

19b–4(f)(6) thereunder.9

A proposed rule change filed under 

Rule 19b–4(f)(6) normally does not 

become operative for 30 days after the 

date of filing. In addition, Rule 19b– 

4(f)(6)(iii) requires a self-regulatory 

organization to provide the Commission 

with 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. However, Rule 19b– 

4(f)(6)(iii) permits the Commission to 

designate a shorter time if such action 

is consistent with the protection of 

investors and the public interest. The 

Exchange requests that the Commission 

waive the 30-day operative delay as well 

as the five business-day pre-filing 

requirement so that the benefits of this 

functionality to Nasdaq market 

participants expected from the rule 

change can be implemented on August 

3, 2009, when the Exchange expects to 

have the technological changes in place 

to support the proposed rule change. 

The Commission believes that waiving 

the 30-day operative delay 10 to make 

this functionality available without 

delay is consistent with the protection 

of investors and the public interest.11

The Commission notes that the proposal 

is similar to rules of other exchanges 

and thus does not raise any novel 

regulatory issues.12 The Commission 

designates the proposal operative upon 

filing to allow the Exchange to 

implement the functionality without 

delay. 

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–NASDAQ–2009–071 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–NASDAQ–2009–071. 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 


PWALKER on DSK8KYBLC1PROD with NOTICES
Federal Register / Vol. 74, No. 146 / Friday, July 31, 2009 / Notices 38249 

13 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. 60122 

(June 17, 2009), 74 FR 30184. 

4New York Stock Exchange LLC imposes an 

access fee of $500 per month for its order imbalance 

datafeed. Nasdaq OMX includes order imbalance 

information in its Nasdaq TotalView datafeed. 

Nasdaq OMX imposes end-user charges on both 

professional and nonprofessional subscribers that 

receive TotalView, as well as an array of monthly 

distribution charges that are significantly higher 

than the charge that NYSE Amex is proposing in 

this proposed rule change. 

5See Securities Exchange Act Release No. 59039 

(December 2, 2008), 73 FR 74770 (December 9, 

2008) (SR–NYSEArca-2006–21) (‘‘NYSE Arca 

Order’’). 

6 In approving this proposed rule change, the 

Commission notes that it has considered the 

Continued 

those that may be withheld from the 

public in accordance with the 

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

available for inspection and copying 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 Nasdaq. 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–NASDAQ–2009–071 and 

should be submitted on or before 

August 21, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–18274 Filed 7–30–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60385; File No. SR– 

NYSEAmex–2009–26] 

Self-Regulatory Organizations; NYSE 

Amex LLC; Order Approving Proposed 

Rule Change To Charge a $500 

Monthly Fee to Recipients of the NYSE 

Amex Order Imbalance Information 

Datafeed 

July 24, 2009. 

I. Introduction 

On June 5, 2009, the NYSE Amex LLC 

(‘‘NYSE Amex’’ or ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

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

Exchange Act of 1934 (the ‘‘Act’’),1 and 

Rule 19b–4 thereunder,2 a proposed rule 

change to charge a $500 monthly fee to 

recipients of the NYSE Amex Order 

Imbalance Information datafeed. The 

proposed rule change was published for 

comment in the Federal Register on 

June 24, 2009.3 The Commission 

received no comments on the proposal. 

This order approves the proposed rule 

change. 

II. Description of the Proposal 

The Exchange proposes to charge a 

$500 monthly fee to recipients of the 

NYSE Amex Order Imbalance 

Information datafeed. NYSE Amex 

Order Imbalance Information provides 

real-time order imbalances that 

accumulate prior to the opening of 

trading on the Exchange and prior to the 

close of trading on the Exchange. The 

Exchange provides this information for 

issues that are likely to be of particular 

trading interest at the opening or 

closing. 

Currently, the Exchange provides this 

datafeed at no cost. The instant filing is 

submitted to establish a $500 monthly 

fee for receipt of the NYSE Amex Order 

Imbalance Information datafeed. This 

proposed $500 monthly fee to recipients 

of the NYSE Amex Order Imbalance 

Information datafeed applies whether 

the recipient receives the datafeed 

directly from the Exchange or indirectly 

from an intermediary. The fee entitles 

the datafeed recipient to make displays 

of that information available to an 

unlimited number of subscribers for no 

extra charge. The Exchange is not 

proposing to impose an end-user or 

display service fee on those subscribers. 

The Exchange states that the $500 

monthly fee would allow vendors to 

redistribute NYSE Amex Order 

Imbalance Information: (1) Without 

having to differentiate between 

professional subscribers and 

nonprofessional subscribers; (2) without 

having to account for the extent of 

access to data; (3) without having to 

procure contracts with its subscribers 

for the benefit of the Exchange; and (4) 

without having to report the number of 

its subscribers. 

The Exchange believes that the fee 

enables the investment community that 

has an interest in the receipt of order 

imbalance information to contribute to 

the Exchange’s operating costs in a 

manner that is appropriate for this 

market data product. 

In setting the level of the NYSE Amex 

Order Imbalance Information Product 

fee, the Exchange states that it took into 

consideration several factors, including: 

(1) The fees that other Exchanges are 

charging for similar services 4; 

(2) consultation with some of the 

entities that the Exchange anticipates 

will be the most likely to take advantage 

of the proposed service; 

(3) the contribution of market data 

revenues that the Exchange believes is 

appropriate for entities that provide 

market data to large numbers of 

investors, which are the entities most 

likely to take advantage of the proposed 

service; and 

(4) the contribution that revenues 

accruing from the proposed fee will 

make to meet the overall costs of the 

Exchange’s operations. 

The Exchange believes that the 

proposed NYSE Amex Order Imbalance 

Information fee would reflect an 

equitable allocation of its overall costs 

to users of its facilities. 

The Exchange believes that the level 

of the fee is consistent with the 

approach set forth in the approval order 

issued by the Commission related to 

ArcaBook fees.5 The Exchange submits 

that the NYSE Amex Order Imbalance 

Information datafeed constitutes ‘‘noncore data’’; i.e., the Exchange does not 

require a central processor to 

consolidate and distribute the product 

to the public pursuant to joint-SRO 

plans. Rather, the Exchange distributes 

this product voluntarily. In addition, the 

Exchange believes that both types of the 

competitive forces that the Commission 

described in the NYSE Arca Order are 

present: (i) The Exchange has a 

compelling need to attract order flow; 

and (ii) the product competes with a 

number of alternative products. 

The Exchange states that it must 

compete vigorously for order flow to 

maintain its share of trading volume. 

This requires the Exchange to act 

reasonably in setting market data fees 

for non-core products such as the NYSE 

Amex Order Imbalance Information 

datafeed. The Exchange hopes that 

NYSE Amex Order Imbalance datafeed 

will enable vendors to distribute NYSE 

Amex order imbalance information 

widely among investors, and thereby 

provide a means for promoting the 

Exchange’s visibility in the marketplace. 

III. Discussion and Commission 

Findings 

The Commission has reviewed 

carefully the proposed rule change and 

finds that the proposed rule change is 

consistent with the requirements of the 

Act and the rules and regulations 

thereunder applicable to a national 

securities exchange.6 In particular, the 


PWALKER on DSK8KYBLC1PROD with NOTICES