Federal Register / Vol. 74, No. 158 / Tuesday, August 18, 2009 / Notices 41765 

21 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. 

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–NYSE–2009–76 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–NYSE–2009–76. 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 NYSE. 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–NYSE– 

2009–76 and should be submitted on or 

before September 8, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.21

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–19730 Filed 8–17–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60465; File No. SR–BX– 

2009–041] 

Self-Regulatory Organizations; 

NASDAQ OMX BX, Inc.; Notice of Filing 

of Proposed Rule Change To Eliminate 

Chapter V, Section 13 (Unusual Market 

Conditions) of the BOX Trading Rules 

and To Modify Related Rules 

August 10, 2009. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on August 3, 

2009, NASDAQ OMX BX, Inc. (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 the Exchange. 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 purpose of the proposed rule 

change is to eliminate Chapter V, 

Section 13 (Unusual Market Conditions) 

of the Trading Rules of the Boston 

Options Exchange Group, LLC (‘‘BOX’’) 

and to modify related rules. The text of 

the proposed rule change is available 

from the principal office of the 

Exchange, at the Commission’s Public 

Reference Room and also on the 

Exchange’s Internet Web site at http:// 

nasdaqomxbx.cchwallstreet.com/ 

NASDAQOMXBX/Filings/. 

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 is 

to eliminate Chapter V, Section 13, as 

well as certain ancillary rules, which 

deal with so-called ‘‘fast markets.’’ The 

Exchange believes that ‘‘fast market’’ 

conditions do not occur on the 

electronic and automated BOX market. 

In cases in which a system malfunction 

or other occurrence caused a delay in 

disseminating accurate quotes, rather 

than relying on the current rules in 

Chapter V, Section 13, the Exchange 

would halt trading until the issue could 

be resolved. 

The Exchange proposes to eliminate 

Chapter V, Section 13, as well as certain 

ancillary rules relating to fast markets. 

The Exchange has never declared a fast 

market. Generally, a fast market is 

characterized by heavy trading and high 

price volatility in which orders may be 

submitted to market makers at such a 

rapid pace that a backlog of orders 

builds, causing delays in execution. If 

such a fast market occurred, delays 

could in turn cause significant price 

differentials between the quoted price 

and executed price. Generally, Chapter 

V, Section 13 provides that if the 

Exchange declared a fast market, it may 

inform traders that quotes are not firm 

and to take other actions as necessary in 

furtherance of a fair and orderly market. 

Chapter V, Section 13 provides for an 

Options Official to determine that the 

level of trading activity or the existence 

of unusual market conditions is such 

that BOX is incapable of collecting, 

processing, and making available to 

quotation vendors the data for the 

option in a manner that accurately 

reflects the current state of the market 

on BOX. Pursuant to current rules, if an 

Options Official determined the market 

in the option to be ‘‘fast,’’ the Official 

could take various steps including 

suspending minimum size requirements 

for quotations, turning off the Price 

Improvement Period (‘‘PIP’’) process, or 

taking other actions in order to promote 

a fair and orderly market. 

In an electronic market such as BOX, 

during trading hours, orders are 


jlentini on DSKJ8SOYB1PROD with NOTICES
41766 Federal Register / Vol. 74, No. 158 / Tuesday, August 18, 2009 / Notices 

4See BOX Trading Rules, Chapter V, Section 16. 

5Subject to certain exceptions written into the 

BOX Trading Rules, such as Directed Orders 

(Chapter VI, Section 5(b)–(c)), and other exposure 

periods (See generally Chapter V, Section 16 

(Execution and Price/Time Priority). 

6See BOX Trading Rules, Chapter V, Section 

10(a). 

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

8 15 U.S.C. 78f(b)(5). 

9 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

matched automatically with quotes on 

the other side of the market according 

to time priority, and executed 

immediately.4 Because there is no 

trading floor and all orders are received 

and managed electronically, all orders 

on BOX are executed with matching 

contra orders within a fraction of a 

second after the matching quote is 

received.5 Any backlog in processing 

orders would be a result of a systems 

malfunction rather than from fast 

market conditions. Should any such 

backlog occur, the Exchange would halt 

trading on BOX until the issue could be 

resolved.6 Accordingly, the Exchange 

believes Chapter V, Section 13 is 

unnecessary in the BOX Rules and 

should be removed. 

In addition to removing Chapter V, 

Section 13, the proposed rule change 

would also remove certain rules related 

to fast markets. The Exchange proposes 

to modify Chapter VI, Section 6(a) to 

remove a fast market rule exception to 

the general rule that all Market Maker 

bids or offers must be of a size of at least 

ten (10) contracts. The Exchange also 

proposes to amend Section 6(c). First, 

Section 6(c)(ii)(2) will be removed to 

reflect the previously described removal 

of Chapter V, Section 13. Second, 

references to Rule 11Ac1–1 will be 

replaced with Rule 602 of Regulation 

NMS under the Exchange Act (‘‘Rule 

602’’). With the implementation of 

Regulation NMS, Rule 11Ac1–1, in 

pertinent part, has been incorporated 

into Rule 602. The proposed rule change 

would also modify Chapter XIV (Index 

Rules), Section 9(b) (Trading Sessions) 

by eliminating the declaration of a fast 

market as a factor in determining 

whether to delay the opening of the 

index options market. 

2. Statutory Basis 

The Exchange believes that the 

proposal is consistent with the 

requirements of Section 6(b) of the Act,7

in general, and Section 6(b)(5) of the 

Act,8 in particular, in that it 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 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. Specifically, the 

proposal will align the BOX Rules to 

more accurately reflect the 

circumstances surrounding trading on 

an electronic exchange and promote 

transparency. 

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 

The Exchange has neither solicited 

nor received comments on 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 the 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 Exchange 

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–BX–2009–041 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–BX–2009–041. 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–BX–2009–041 and should 

be submitted on or before September 8, 

2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–19732 Filed 8–17–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60476; File No. SR–CBOE– 

2009–056] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Related to the Hybrid 

Matching Algorithms 

August 11, 2009. 

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 July 31, 


jlentini on DSKJ8SOYB1PROD with NOTICES