41472 Federal Register / Vol. 74, No. 157 / Monday, August 17, 2009 / Notices 

11 15 U.S.C. 78o–3(b)(6). 

12 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. 

choose to settle an arbitration claim 

(e.g., for business reasons) 

notwithstanding the desire of a subject 

person to contest the claim. In addition, 

both criminal charges and convictions 

that are reported subsequently may have 

a different disposition, which may 

significantly change the meaning of the 

matter as originally reported (for 

example, such charges or convictions 

may be dismissed or expunged). Finally, 

FINRA does not view reportable 

financial matters (e.g., bankruptcies and 

liens) as having the same degree of 

materiality as final regulatory actions 

such that they should continue to be 

disclosed on a permanent basis. 

FINRA will announce the effective 

date of the proposed rule change in a 

Regulatory Notice to be published no 

later than 60 days following 

Commission approval. 

2. Statutory Basis 

FINRA believes that the proposed rule 

change is consistent with the provisions 

of Section 15A(b)(6) of the Act,11 which 

requires, among other things, that 

FINRA rules must be designed to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, and, in 

general, to protect investors and the 

public interest. The proposed rule 

change, among other things, would 

enhance investor protection by 

providing access through the 

BrokerCheck program to certain 

information about former associated 

persons of a member who were the 

subject of a final regulatory action as 

defined in Form U4 that has been 

reported to CRD on a uniform 

registration form. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

FINRA 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 were neither 

solicited nor received. 

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–FINRA–2009–050 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–FINRA–2009–050. 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 such filing also will be 

available for inspection and copying at 

the principal office of FINRA. 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–FINRA–2009–050 and 

should be submitted on or before 

September 8, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–19571 Filed 8–14–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60461; File No. SR–Phlx2009–66] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX, Inc.; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to Fee 

Waivers 

August 7, 2009. 

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 July 31, 

2009, 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 selfregulatory 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 the 

NASDAQ OMX PHLX Fee Schedule to 

adopt, on a pilot basis, a waiver of the 

Phlx XL II Options Routing PassThrough Fees for customer orders that 

are routed by the Exchange’s enhanced 

electronic trading platform for options, 

Phlx XL II to away markets for 

execution. 

The proposed fee waiver pilot would 

apply to transactions settling on or after 

July 1, 2009, and extend through 

December 31, 2009. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http:// 

nasdaqomxphlx.cchwallstreet.com/ 

NASDAQOMXPHLX/Filings/, at the 

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Federal Register / Vol. 74, No. 157 / Monday, August 17, 2009 / Notices 41473 

4See e-mail from Richard S. Rudolph, Assistant 

General Counsel, NASDAQ OMX, to Christopher 

Chow, Special Counsel, Commission, dated August 

5, 2009. 

5See Securities Exchange Act Release No. 60103 

(June 11, 2009), 74 FR 29252 (June 19, 2009) (SR– 

Phlx 2009–47). 

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

7 15 U.S.C. 78f(b)(4). 

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

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 proposed rule 

change is to amend the NASDAQ OMX 

PHLX Fee Schedule to adopt, on a pilot 

basis, a waiver of the Phlx XL II Options 

Routing Pass-Through Fee (the ‘‘fee’’).4

The Exchange recently adopted the fee 

for executions of options orders entered 

into the Phlx XL II system that are 

routed to away markets.5 The Exchange 

now proposes to waive the fee entirely 

for Phlx members and member 

organizations using the Phlx XL II 

system for routing standardized equity 

and index options to away markets for 

execution. The pilot would apply to 

transactions settling on or after July 1, 

2009, and extend through December 31, 

2009. 

In the filing that adopted the fee, the 

Exchange stated its belief that these 

routing fees are inherently competitive, 

fair and reasonable, and nondiscriminatory in that they replicate the 

fees assessed by away markets executing 

orders routed from the Phlx XL II 

system. As with all fees, the Exchange 

may adjust these routing fees in 

response to competitive conditions by 

filing a new proposed rule change. This 

proposal represents such a response. 

Competitive Conditions 

The routing fee applies today when 

the Phlx XL II system receives an order 

and there is a better bid or offer on an 

away market that the system can access 

for the execution of such order. The 

order is routed via Nasdaq Options 

Services LLC (‘‘NOS’’), a member of the 

Exchange, as the Exchange’s exclusive 

order router. The sole use of NOS by the 

Phlx XL II system is to route orders in 

options listed and open for trading on 

the Phlx XL II system to destination 

markets. A particular destination market 

would charge NOS their applicable 

transaction fees, which are then passed 

through to Phlx, and ultimately to the 

initiating member. Similarly, clearing 

fees charged to NOS by the Options 

Clearing Corporation (‘‘OCC’’) are 

passed through in this manner. 

The Exchange is aware of at least one 

competing U.S options exchange that 

does not pass through away market 

transaction and routing fees to the 

originating member. The Exchange 

believes that, absent a waiver of its 

current fee, it could lose valuable option 

order flow, due to the fact that a 

competing exchange currently does not 

charge such a fee. 

The competition among the seven U.S 

options exchanges to attract order flow 

from market participants is fierce. In 

order to maintain its share of trading 

volume, the Exchange must be 

competitive in setting its fees for all 

services provided, including routing of 

options to better-priced away markets. 

In fact, the market participants that will 

pay routing pass-through fees often will 

be the same market participants from 

whom the Exchange must attract order 

flow. These market participants include 

broker-dealers that control the handling 

of a large volume of customer order 

flow. Given the portability of order flow 

from one exchange to another, an 

exchange that would charge routing 

fees, while at least one other competing 

market does not, would risk alienating 

many of the same market participants 

on whose orders it depends for 

competitive survival. 

The Exchange believes therefore that 

the proposed waiver of the fee is 

competitive, fair and reasonable, and 

non-discriminatory in that such waiver 

replicates the practice of at least one 

competing options exchange respecting 

routing pass-through fees. 

Applicability of Fee Waiver 

The proposal would apply on a pilot 

basis for transactions settling on or after 

July 1, 2009, and extending through 

December 31, 2009, at which time the 

pilot would expire. The purpose of the 

pilot is to give the Exchange the 

opportunity to review and analyze its 

competitive position and market share 

to determine the effectiveness of the fee 

waiver. 

The proposed waiver would apply to 

transactions that have taken place 

during the month of July, 2009. As of 

the filing of this proposal, the 

Exchange’s billing cycle for July, 2009 is 

not complete, and pass-through routing 

fees that would ordinarily be charged 

may still be waived before the July 

billing cycle expires. Therefore, the 

exchange believes that it is fair, 

reasonable and non-discriminatory to 

apply the fee waiver to transactions 

settling on or after July 1, 2009, and 

extending through the proposed 

December 31, 2009 pilot expiration. 

Members will be notified of the fee 

waiver by way of an Options Trader 

Alert (‘‘OTA’’) posted on the Exchange’s 

Web site. 

2. Statutory Basis 

The Exchange believes that its 

proposal to amend its schedule of fees 

is consistent with Section 6(b) of the 

Act 6 in general, and furthers the 

objectives of Section 6(b)(4) of the Act 7

in particular, in that it is an equitable 

allocation of reasonable fees and other 

charges among Exchange members. The 

Phlx is one of seven options markets in 

the national market system for 

standardized options. Joining Phlx and 

electing to trade options is entirely 

voluntary. Under these circumstances, 

Phlx’s fees must be competitive and low 

in order for Phlx to attract order flow, 

execute orders, and grow as a market. At 

least one competing market does not 

charge these fees and it is reasonable for 

Phlx to waive its pass-through routing 

fees as described above. As such, Phlx 

believes that its fees are fair and 

reasonable and consistent with the Act. 

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 solicited 

or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) of the Act 8 and paragraph 

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41474 Federal Register / Vol. 74, No. 157 / Monday, August 17, 2009 / Notices 

9 17 CFR 240.19b–4(f)(2). 

10 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. 60184 

(June 29, 2009), 74 FR 32209 (July 7, 2009) 

(hereinafter referred to as ‘‘Notice’’). 

4 15 U.S.C. 78f(b)(4) and (b)(5). 

5See Notice, supra note 3. 

(f)(2) of Rule 19b–4 9 thereunder. 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-2009–66 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Commission, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–Phlx-2009–66. 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 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–Phlx– 

2009–66 and should be submitted on or 

before September 8, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–19572 Filed 8–14–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60468; File No. SR– 

NYSEArca–2009–52] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Order Approving Proposed 

Rule Change To Amend the Schedule 

of Fees and Charges for Exchange 

Services 

August 10, 2009. 

I. Introduction 

On June 10, 2009, NYSE Arca, Inc. 

(‘‘NYSE Arca’’ or ‘‘Exchange’’) through 

its wholly-owned subsidiary, NYSE 

Arca Equities, Inc. (‘‘NYSE Arca 

Equities’’), filed with the Securities and 

Exchange Commission (‘‘Commission’’), 

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

Securities Exchange Act of 1934 

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

proposed rule change amending its 

Schedule of Fees and Charges for 

Exchange Services (‘‘Fee Schedule’’) to 

revise the Listing Fees applicable to 

Derivative Securities Products. The 

proposed rule change was published in 

the Federal Register on July 7, 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 amending its 

Fee Schedule to revise the Listing Fees 

applicable to Derivative Securities 

Products listed under NYSE Arca Rules 

5.2(j)(3) (Investment Company Units), 

8.100 (Portfolio Depository Receipts), 

8.200 (Trust Issued Receipts), 8.201 

(Commodity-Based Trust Shares), 8.202 

(Currency Trust Shares), 8.203 

(Commodity Index Trust Shares), 8.204 

(Commodity Futures Trust Shares), 

8.300 (Partnership Units), 8.500 (Trust 

Units), and 8.600 (Managed Fund 

Shares) on NYSE Arca, LLC, the equities 

facility of NYSE Arca Equities. 

Specifically, the Exchange proposes to 

add a new provision to the Fee 

Schedule which states that in the case 

where a sponsor, managing owner, 

general partner or equivalent 

(collectively, the ‘‘Sponsor’’) is listing a 

new Derivative Securities Product on 

the Exchange for the first time, the 

Sponsor will be charged a one time 

consultation fee in the amount of 

$20,000. 

The proposed consulting charge 

would apply to all new Sponsors listing 

a new Derivative Securities Product for 

the first time on the Exchange. 

Therefore, under the proposal Sponsors 

who have previously issued a new 

Derivative Securities Product would not 

be charged the proposed consulting fee. 

Moreover, the current Listing and 

Annual Fees applicable to Derivative 

Securities Products would remain 

unchanged and be applicable to all 

Sponsors of Derivative Securities 

Products. 

III. Discussion and Commission’s 

Findings 

After careful review, the Commission 

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. Specifically, the 

Commission finds that the proposal is 

consistent with Sections 6(b)(4) and 

(b)(5) of the Act,4 which require, among 

other things, that the rules of an 

exchange (i) provide for the equitable 

allocation of reasonable dues, fees, and 

other charges among its members and 

issuers and other persons using its 

facilities, and (ii) are not designed to 

permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

According to the Exchange, the 

imposition of the proposed one-time 

consulting charge to new Sponsors of 

new Derivative Securities Products is 

necessary to adequately compensate the 

Exchange for all of the additional 

resources dedicated to such new 

Sponsors, such as the additional legal 

and business resources required to 

properly advise novice Sponsors 

through the listing process.5 The 

Exchange believes that the proposed 

consulting fee would enable the 

Exchange to continue to provide new 

issuers with the level of service 

necessary to successfully navigate an 

initial launch of a Derivative Securities 

Product. Moreover, the Exchange has 

represented that the proposed new 

Sponsor Fee is substantially below the 

mstockstill on DSKH9S0YB1PROD with NOTICES