Federal Register / Vol. 74, No. 148 / Tuesday, August 4, 2009 / Notices 38677 

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

2A ‘‘conventional municipal bond’’ was defined 

as ‘‘a bond without any derivatives attached to it 

and no inherent features that would prevent a 

redemption announcement from being provided in 

a timely manner.’’ 

3 15 U.S.C. 78q–1. 

By the Commission. 

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–18669 Filed 7–31–09; 4:15 pm] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60394; File No. SR–DTC– 

2009–13] 

Self-Regulatory Organizations; The 

Depository Trust Company; Notice of 

Filing of Proposed Rule Change 

Relating to Municipal Bonds 

Redemption Process 

July 28, 2009. 

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

Securities Exchange Act of 1934 

(‘‘Act’’),1 notice is hereby given that on 

July 15, 2009, The Depository Trust 

Company (‘‘DTC’’) 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 primarily by DTC. 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 

DTC proposes to modify the timing 

when an issuer of certain municipal 

securities or its agent notifies DTC of a 

redemption or an advance refunding of 

such municipal securities. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

DTC 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. DTC 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 

In early 2008, the Association of 

Global Custodians (‘‘AGC’’) and DTC 

formed a working group to explore 

issues associated with redemption 

announcements. Several meetings were 

held in 2008 with participation from 

members of the AGC, The Securities 

Industry and Financial Markets 

Association, the agent community, DTC, 

and DTC’s participants. 

Among other things, the working 

group reviewed redemption 

announcement data for a six month 

period and discovered that many 

conventional municipal bond 2 issuers 

or their agents were notifying DTC of 

the redemption or refund later than the 

30 day Publication Date period as 

required in DTC’s rules. The working 

group then investigated the 

ramifications of this and concluded that 

if DTC were to amend the Publication 

Date from the current standard of ‘‘no 

fewer than 30 calendar days’’ prior to 

the redemption or advance refund to 

‘‘no fewer than 20 calendar days’’ prior 

to the redemption or advance refund for 

conventional municipal bonds, DTC 

would still have sufficient time to 

process the redemption announcement 

and issuers and their agents would have 

more time to notify DTC of a 

redemption thereby making the 

redemption notification process more 

efficient. The working group presented 

this proposal to the American Bankers 

Association and to the National 

Association of Bond Lawyers and both 

organizations approved this 

recommendation. 

Therefore, DTC proposes to amend 

Part V.A. of its Operational 

Arrangements to redefine the time frame 

for an issuer or its agent of a 

conventional municipal bond to notify 

DTC of a full or partial redemption or 

an advance refunding of part of such 

outstanding securities. Under the 

proposal, the issuer or agent will have 

to notify DTC at least two business days 

prior to the Publication Date, which will 

be redefined as ‘‘no fewer than 20 

calendar days nor more than 60 

calendar days prior to the redemption 

date or, in the case of an advance 

refunding, the date that the proceeds are 

deposited in escrow (and, in such cases, 

final notification must be received no 

later than 20 calendar days prior to the 

refunding date.)’’ DTC proposes that this 

new requirement would be effective 

October 1, 2009. 

DTC states that the proposed rule 

change is consistent with the 

requirements of Section 17A of the Act 3

and the rules and regulations 

thereunder because it modifies an 

existing DTC service in order to make 

the redemption process for municipal 

bonds more efficient. As such it is a 

change to an existing service, which 

will not adversely affect the 

safeguarding of securities and funds in 

DTC’s control or custody. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

DTC does not believe that the 

proposed rule change will have any 

impact or impose any burden on 

competition. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments relating to the 

proposed rule change have not yet been 

solicited or received. DTC will notify 

the Commission of any written 

comments received by DTC. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within thirty-five 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 

ninety 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 

No. SR–DTC–2009–13 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 No. 

SR–DTC–2009–13. This file number 

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38678 Federal Register / Vol. 74, No. 148 / Tuesday, August 4, 2009 / Notices 

4 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 It is important to keep in mind that Institutional 

Brokers manually enter orders into the Matching 

System through Brokerplex and those orders are 

often competing for priority with system-generated 

orders of algorithmic order senders. 

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 

Section, 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 filings also will be 

available for inspection and copying at 

DTC’s principal office and DTC’s Web 

site at (http://www.dtc.org/impNtc/mor/ 

index.html). 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. SR–DTC–2009– 

13 and should be submitted on or before 

August 25, 2009. 

For the Commission by the Division of 

Trading and Markets, pursuant to delegated 

authority.4

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–18558 Filed 8–3–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60395; File No. SR–CHX– 

2009–10] 

Self-Regulatory Organizations; 

Chicago Stock Exchange, Inc.; Notice 

of Filing of a Proposed Rule Change 

To Add the Quote@CHX and 

Reprice@CHX Order Types to 

Brokerplex System 

July 28, 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 23, 

2009, Chicago Stock Exchange, Inc. 

(‘‘CHX’’ or 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 CHX. 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 CHX proposes to amend its rules 

to allow Exchange-registered 

Institutional Brokers to enter two new 

order types, known as Quote@CHX and 

Reprice@CHX, when using the 

Brokerplex® order entry system. The 

text of this proposed rule change is 

available on the Exchange’s Web site at 

(http://www.chx.com) and in 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 

CHX included statements concerning 

the purpose of and basis for the 

proposed rule changes and discussed 

any comments it received regarding the 

proposal. The text of these statements 

may be examined at the places specified 

in Item IV below. The CHX 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 proposes to add 

Interpretations and Policies .04 to the 

Article 17 obligations of CHX-registered 

Institutional Brokers to permit the entry 

of two new order types within 

Brokerplex for Institutional Brokers to 

use when submitting orders to the CHX 

Matching System for display and 

potential execution. The new order 

types are known as ‘‘Quote@CHX’’ and 

‘‘Reprice@CHX.’’ 

The Brokerplex system is an order 

entry and management system 

developed and operated by the 

Exchange for use on a non-exclusive 

basis by CHX-registered Institutional 

Brokers to receive and hold orders from 

their clients while seeking execution on 

the CHX or elsewhere in the National 

Market System. The Exchange seeks to 

add two new order types within 

Brokerplex for Institutional Brokers to 

use when submitting orders to the CHX 

Matching System for display and 

potential execution. 

In many instances, Institutional 

Brokers would like to display orders in 

the CHX Matching System when seeking 

trade execution rather than simply 

hitting bids or lifting offers already 

displayed in the marketplace. By doing 

so, they could achieve a level of price 

improvement for their customers. 

Rapidly changing quotes in today’s 

market environment often make it 

difficult to successfully post a bid or 

offer, however, since a standard limit 

order entered by the Institutional Broker 

may lock or cross the National Best Bid 

or Offer (‘‘NBBO’’) by the time that 

order entry is complete (by our rules, 

the Matching System automatically 

rejects orders in such circumstances).3

The new Quote@CHX order type 

would allow the Institutional Broker to 

submit an order to be priced within 

Brokerplex at a defined limit price 

which is one minimum price increment 

(normally 1 cent for most securities) 

from the relevant side of the National 

Best Bid or Offer (‘‘NBBO’’) at the time 

of order submission. For buy orders, the 

relevant side of the NBBO is the offer; 

for sell orders it is the bid. The pricing 

of the Quote@CHX (and Reprice@CHX) 

order is done solely within Brokerplex 

and the order is then sent as a limit 

order by Brokerplex to the Matching 

System. For example, if the Institutional 

Broker has set the incremental offset at 

1 cent and the NBBO was 20.10 x 20.13, 

a Quote@CHX buy order would be 

automatically priced and submitted by 

Brokerplex to the Matching System as a 

20.12 limit order. The systematic 

pricing of the Quote@CHX (and 

Reprice@CHX) orders is non-dynamic, 

i.e., the order does not automatically 

reprice upon changes to the NBBO once 

it has been accepted by the Matching 

System. 

The Reprice@CHX order type allows 

an Institutional Broker to change an 

existing limit order residing in the 

Matching System and replace it with an 

order generated in the same manner as 

a Quote@CHX order type. Submission of 

a Reprice@CHX order would generate an 

instruction to (1) cancel a limit order 

previously submitted by an Institutional 

Broker to the Matching System and (2) 

generate a new order to either buy or 

sell (priced by Brokerplex in the same 

manner as for Quote@CHX orders as 

described above) and send it to the 

Matching System as a limit order. 

mstockstill on DSKH9S0YB1PROD with NOTICES