Federal Register / Vol. 74, No. 164 / Wednesday, August 26, 2009 / Notices 43207 

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

2 17 CFR 240.19b–4. 

3 ‘‘OTC Equity Security’’ means any nonexchange-listed security and certain exchange-listed 

securities that do not otherwise qualify for real-time 

trade reporting. See FINRA Rule 6420(d). 

4The proposed rule also corrects certain crossreferences to FINRA rules that have been adopted 

in the consolidated FINRA rulebook. 

5See Securities Exchange Act Release No. 51808 

(June 9, 2005), 70 FR 37496 (June 29, 2005) 

(‘‘Regulation NMS Adopting Release’’). 

6See Securities Exchange Act Release No. 52280 

(August 17, 2005), 70 FR 49959 (August 25, 2005) 

(Proposed rule change to impose restrictions on the 

display of quotes and orders in sub-penny 

increments for non-Nasdaq OTC equity securities; 

File No. SR–NASD–2005–095). See Securities 

Exchange Act Release No. 55717 (May 7, 2007), 72 

FR 26856 (May 11, 2007) (Proposed amendment to 

exclude from the access fee display requirements 

any access fees below a specified level; File No. SR– 

NASD–2007–029). 

7See Securities Exchange Act Release No. 49325 

(Feb. 26, 2004), 69 FR 11126 (Mar. 9, 2004). See also 

Securities Exchange Act Release No. 50870 

(December 16, 2004), 69 FR 77423 (December 27, 

2004). 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60515; File No. SR–FINRA– 

2009–054] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing of 

Proposed Rule Change To Extend 

Certain Regulation NMS Protections to 

Quoting and Trading in the Market for 

OTC Equity Securities 

August 17, 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 August 7, 

2009, the Financial Industry Regulatory 

Authority, Inc. (‘‘FINRA’’) 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 FINRA. 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 

FINRA is proposing to adopt new 

FINRA Rules 6434 (Minimum Pricing 

Increment for OTC Equity Securities), 

6437 (Prohibition from Locking or 

Crossing Quotations in OTC Equity 

Securities), 6450 (Restrictions on Access 

Fees) and 6460 (Display of Customer 

Limit Orders). 

The text of the proposed rule change 

is available on FINRA’s Web site at 

http://www.finra.org, at the principal 

office of FINRA 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, 

FINRA 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. FINRA 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 

FINRA is proposing to adopt new 

rules to extend certain Regulation NMS 

protections to quoting and trading in 

over-the-counter equity securities 

(‘‘OTC Equity Securities’’).3

Specifically, FINRA is proposing rules 

to: (1) Restrict sub-penny quoting; (2) 

restrict locked and crossed markets; (3) 

implement a cap on access fees; and (4) 

require the display of customer limit 

orders.4

A. Background 

On June 9, 2005, the SEC adopted 

Regulation NMS.5 Regulation NMS, in 

addition to re-designating the national 

market system rules previously adopted 

under Section 11A of the Act, also 

established new substantive rules to 

modernize and strengthen the regulatory 

structure of the U.S. equity markets. 

Among other things, in adopting 

Regulation NMS, the SEC prohibited the 

imposition of access fees in excess of 

certain prescribed limitations; required 

SRO rules to address locked or crossed 

quotations; and prohibited the display 

of orders, quotations, and indications of 

interest in a pricing increment smaller 

than a penny (except where the security 

is priced at less than $1.00 per share in 

which case certain restrictions apply). 

Regulation NMS also includes a preexisting customer limit order display 

requirement, which renumbered 

Exchange Act Rule 11Ac1–4 as Rule 604 

under the Regulation. 

These provisions of Regulation NMS 

apply only to trading in NMS stocks as 

defined in Rule 600(b)(47) of Regulation 

NMS and do not apply to trading in 

OTC Equity Securities. FINRA 

previously filed with the SEC rule 

changes to apply aspects of Regulation 

NMS to quoting and trading in OTC 

Equity Securities. In particular, FINRA 

filed with the SEC a proposed rule 

change to impose sub-penny quoting 

prohibitions on OTC Equity Securities 

and a separate proposed rule change to 

impose restrictions on access fees.6

In light of developments to date, 

FINRA has determined that extending 

certain NMS principles to the OTC 

equity market would be best if proposed 

together, rather than individually. Thus 

FINRA is now proposing to adopt rules 

to: (1) Restrict sub-penny quoting; (2) 

restrict locked and crossed markets; (3) 

implement a cap on access fees; and (4) 

require the display of customer limit 

orders. FINRA believes that these 

Regulation NMS principles, if applied to 

OTC Equity Securities, would enhance 

market quality and investor protections 

in this market. 

B. Restrictions on Sub-penny Quoting 

FINRA is proposing new FINRA Rule 

6434 (Minimum Pricing Increment for 

OTC Equity Securities) to impose 

restrictions on the display of quotes and 

orders in sub-penny increments for OTC 

Equity Securities. Specifically, FINRA is 

proposing to prohibit members from 

displaying, ranking, or accepting from 

any person a bid or offer, order, or 

indication of interest in an OTC Equity 

Security in an increment smaller than 

$0.01 if the bid or offer, order, or 

indication of interest is priced $1.00 or 

greater per share, in an increment 

smaller than $0.0001 if the bid or offer, 

order, or indication of interest is priced 

below $1.00 and greater than $0.01 per 

share, and in an increment smaller than 

$0.000001 if the bid or offer, order or 

indication of interest is priced less than 

$0.01 per share. 

Market participants currently quote in 

increments ranging from pennies to 

hundredths of pennies. As the SEC 

stated in the proposing release for 

Regulation NMS and in the Regulation 

NMS Adopting Release, potential harms 

associated with sub-penny quoting 

include an increase in the incidence of 

market participants stepping ahead of 

standing limit orders for an 

economically insignificant amount and 

added difficulty for broker-dealers to 

meet certain of their regulatory 

obligations by increasing the incidence 

of so-called ‘‘flickering’’ quotes.7 FINRA 

believes that essentially the same 

potential problems exist with respect to 

sub-penny quoting in OTC Equity 

Securities. Accordingly, FINRA is 


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43208 Federal Register / Vol. 74, No. 164 / Wednesday, August 26, 2009 / Notices 

8A ‘‘locking quotation’’ is the display of a bid (or 

offer) at a price that equals the displayed price of 

an offer (or bid) for a security in the same ‘‘interdealer quotation system’’ (as defined in proposed 

Rule 6437). A ‘‘crossing quotation’’ is the display 

of a bid (or offer) at a price that is higher than the 

displayed price of an offer (or bid) for a security in 

the same inter-dealer quotation system. 

9Because there currently is not a mandated 

consolidated quotation dissemination mechanism 

for OTC Equity Securities as exists with NMS 

stocks, the proposed rule only restricts locking and 

crossing quotations within inter-dealer quotation 

systems, but not across inter-dealer quotations 

systems. 

10These standards are substantially similar to the 

access fee restrictions in Regulation NMS. See 

Regulation NMS Adopting Release. Note, however, 

that the restrictions under Rule 610(c) of Regulation 

NMS are limited to ‘‘protected quotations,’’ for 

which there is no comparable designation in the 

OTC equity market. Instead, the proposal would 

apply the restrictions uniformly to all quotations 

displayed in the OTC equity market. 

proposing a new rule that would adopt 

an approach to sub-penny quoting that 

is consistent with that implemented by 

the SEC in Regulation NMS. 

FINRA believes that the proposed 

restrictions on sub-penny quoting will 

promote greater price transparency and 

consistency. As noted above, FINRA 

also believes that sub-penny restrictions 

limit the practice of ‘‘stepping ahead’’ of 

displayed limit orders by trivial 

amounts and, therefore, the proposed 

new rule should further encourage the 

display of limit orders and improve the 

depth and liquidity of the market. 

C. Locked and Crossed Markets 

FINRA rules do not currently prohibit 

locking or crossing quotations in OTC 

Equity Securities.8 As the SEC noted in 

the Regulation NMS Adopting Release, 

locked and crossed markets can cause 

confusion among investors concerning 

trading interest in a stock and, therefore, 

FINRA believes that restricting the 

practice of submitting locking or 

crossing quotations will enhance the 

usefulness of quotation information for 

OTC Equity Securities. 

Rule 610(d) of Regulation NMS 

(Access to Quotations) requires that 

each national securities exchange and 

national securities association establish, 

maintain, and enforce written rules 

restricting locking and crossing 

activities. In furtherance of this 

requirement, FINRA adopted Rule 6240 

(Prohibition from Locking or Crossing 

Quotations in NMS Stocks), which 

generally requires members to avoid 

displaying, or engaging in a pattern or 

practice of displaying, any quotations 

that lock or cross a protected quotation, 

and any manual quotations that lock or 

cross a quotation previously 

disseminated pursuant to an effective 

NMS Plan. 

Consistent with the principles of 

Regulation NMS’s locking and crossing 

restrictions, FINRA is proposing to 

require that members implement 

policies and procedures that reasonably 

avoid the display of, or engaging in a 

pattern or practice of displaying, locking 

or crossing quotations in any OTC 

Equity Security within the same interdealer quotation system.9 FINRA 

believes that the proposed policies and 

procedures approach is appropriate for 

addressing locked and crossed 

quotations in this market in light of the 

differences inherent in the quoting and 

trading of OTC Equity Securities as 

compared to NMS stocks. 

As the SEC noted in the Regulation 

NMS Adopting Release with respect to 

the adoption of Rule 610(d), FINRA also 

recognizes that a member’s quotations 

may, on occasion, accidentally lock or 

cross another member’s quotations. 

Thus, similar to Rule 6240, FINRA 

would expect that members’ policies 

and procedures would require the 

quoting participant to make ‘‘reasonable 

efforts’’ to first contact or route an order 

to execute against the full displayed size 

of any quotation before locking and 

crossing that quotation. For example, a 

member firm may also include so-called 

‘‘ship and post’’ procedures that require 

such firm to attempt to execute against 

a relevant displayed quotation while 

posting a quotation that could lock or 

cross such a quotation. In addition, 

members’ policies and procedures must 

be reasonably designed to enable the 

reconciliation of locked or crossed 

quotations, including requiring the 

member to take reasonable action to 

resolve the locked or crossed market 

when such member is responsible for 

displaying the locking or crossing 

quotation. FINRA believes that 

implementation of policies and 

procedures to avoid locking and 

crossing quotations, in conjunction with 

members’ existing obligation to honor 

posted quotations pursuant to NASD 

Rule 3320 (Offers at Stated Prices) and 

NASD IM–3320 (Firmness of 

Quotations), will facilitate more fair and 

orderly markets and support market 

efficiency. 

D. Access Fee Cap 

FINRA is proposing a new rule to 

prohibit members from imposing nonsubscriber access or post-transaction 

fees against published quotations in any 

OTC Equity Security that exceed or 

accumulate to more than specified 

amounts. 

Currently, FINRA Rule 6540(c) 

requires that an ATS or ECN reflect nonsubscriber access or post-transaction 

fees in the ATS’s or ECN’s posted quote 

in the OTC Bulletin Board montage. 

There are no restrictions on ATS or ECN 

access fees displayed in other interdealer quotation systems, such as the 

Pink Sheets. FINRA is proposing to 

eliminate the requirement that members 

reflect access fees in OTCBB posted 

quotations, and to replace that 

requirement with a uniform access fee 

cap, consistent with Rule 610(c) of 

Regulation NMS. The proposed fee cap, 

as set forth in proposed Rule 6450, 

would restrict access fees in all OTC 

Equity Securities that exceed or 

accumulate to more than the following 

limits: 

a. If the price of the quotation is $1.00 

or more, the fee or fees cannot exceed 

or accumulate to more than $0.003 per 

share; or 

b. If the price of the quotation is less 

than $1.00, the fee or fees cannot exceed 

or accumulate to more than 0.3% of the 

quotation price per share.10

Also consistent with Regulation NMS, 

the proposal would codify that market 

makers, as well as ATSs, are permitted 

to charge access fees within the 

framework of the proposed access fee 

cap. 

Consistent with the SEC’s conclusions 

in adopting Regulation NMS, FINRA 

believes that capping access fees is the 

most effective approach of the available 

alternatives, as well as the least 

disruptive to current market practice 

(other alternatives include an access fee 

display requirement and an outright 

prohibition on access fees). As the SEC 

stated in the Regulation NMS Adopting 

Release, a single, uniform fee limitation 

of $0.003 per share is the fairest and 

most appropriate resolution of the 

access fee issue. First, it will not 

seriously interfere with current business 

practices because trading centers have 

very few fees on their books of more 

than $0.003 per share and do not earn 

substantial revenues from such fees. In 

addition, a uniform fee limitation 

promotes equal regulation of different 

types of trading centers, where 

previously some had been permitted to 

charge fees and some had not. The SEC 

also noted that if wide disparities in 

access fees were permitted, the prices of 

quotations would be less useful and 

accurate. Therefore, a limitation on the 

level of access fees addresses the 

potential distortions caused by 

substantial, disparate fees. 

E. Limit Order Display 

Rule 604 of Regulation NMS requires 

the immediate display of customer limit 

orders. Specifically, Regulation NMS 

requires the display of (1) the price and 


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Federal Register / Vol. 74, No. 164 / Wednesday, August 26, 2009 / Notices 43209 

11Under Rule 604 of Regulation NMS, the 

requirement to ‘‘publish immediately’’ a customer 

limit order requires the display (or execution or rerouting) of customer limit orders as soon as is 

practicable after receipt which, under normal 

market conditions, would require display no later 

than 30 seconds after receipt. See Securities 

Exchange Act Release No. 37619A, 61 FR 48290 

(September 12, 1996). FINRA proposes to adopt this 

same interpretation with respect to the timing of 

display of customer limit orders in OTC Equity 

Securities. 

12Under Rule 604 of Regulation NMS, a customer 

limit order should be considered de minimis if it 

is less than or equal to 10% of the displayed size 

associated with a specialist’s or OTC market 

maker’s bid or offer and FINRA proposes to adopt 

this same interpretation with respect to the 

proposed rule. See Exchange Act Release No. 

37619A, 61 FR 48290 (September 12, 1996). 

13As discussed in Trade Reporting Notice 3/18/ 

08, with respect to OTC Equity Securities trading 

at $175 or more per share, FINRA has designated 

the ‘‘unit of trade’’ as one share rather than 100 

shares for purposes of public dissemination. As 

such, trades in these securities for fewer than 100 

shares are not considered ‘‘odd-lot transactions’’ 

and are disseminated by FINRA. However, for all 

other purposes, including the amendments 

proposed herein, transactions and orders of fewer 

than 100 shares are considered ‘‘odd lots,’’ unless 

otherwise specifically determined by FINRA. 

14Under Regulation NMS, a ‘‘block size’’ with 

respect to an order means it is: (i) of at least 10,000 

shares or (ii) for a quantity of stock having a market 

value of at least $200,000. Because of the lower 

average trade prices (and corresponding higher 

average total share amount) of orders in OTC Equity 

Securities, FINRA believes that a 10,000 share 

standard alone would exclude customer limit 

orders that should otherwise be displayed. 

Therefore, FINRA is proposing that the definition 

of ‘‘block size’’ under the rule for OTC Equity 

Securities be an order that is: (i) Of at least 10,000 

shares and (ii) has a market value of at least 

$100,000. This is consistent with the large order 

size exception under IM–2110–2 (Trading Ahead of 

Customer Limit Order). 

15FINRA also is proposing to exclude from Rule 

2320(g)(2) those priced quotations that represent a 

customer limit order displayed on an electronic 

communications network in conformance with this 

proposed exception. Rule 2320(g)(2) requires that 

members display the same priced quotation in a 

non-exchange-listed security when quoting in two 

or more quotation mediums. 

16 15 U.S.C. 78o–3(b)(6). 

17 15 U.S.C. 78o–3(b)(11). 

the full size of each customer limit order 

that is at a price that would improve the 

bid or offer of the specialist or OTC 

market maker in such security; and (2) 

the full size of each customer limit order 

held by the specialist or OTC market 

maker that: Is priced equal to the bid or 

offer of such specialist or OTC market 

maker for such security; is priced equal 

to the national best bid or national best 

offer; and represents more than a de 

minimis change in relation to the size 

associated with the specialist or OTC 

market maker’s bid or offer. 

FINRA is proposing to impose a 

similar requirement on customer limit 

orders in OTC Equity Securities, 

specifically, a market maker displaying 

a priced quote would be required to 

immediately 11 display customer limit 

orders that it receives that (1) improve 

the price of the bid or offer displayed by 

the market maker, or (2) improve the 

size of its bid or offer by more than a 

de minimis amount where it is the best 

bid or offer in the inter-dealer quotation 

system where the market maker is 

quoting.12 Regulation NMS includes 

several exceptions from its limit order 

display requirements, which also would 

apply to the proposed limit order 

display rule for OTC Equity Securities. 

Thus the proposed rule would except 

any customer limit order: 

a. That is executed upon receipt of the 

order. 

b. That is placed by a customer who 

expressly requests that the order not be 

displayed. 

c. That is an odd-lot order.13

d. That is a block size order, unless 

a customer placing such order requests 

that the order be displayed.14

e. That is delivered immediately upon 

receipt to a national securities exchange 

or an electronic communications 

network that widely disseminates such 

order and immediately provides to an 

inter-dealer quotation system the prices 

and sizes of the orders at the highest 

buy price and the lowest sell price for 

such security.15

f. That is delivered immediately upon 

receipt to another OTC market maker 

that complies with the proposed limit 

order display requirements with respect 

to that order. 

g. That is an all-or-none order. 

In adopting the limit order display 

requirements for NMS stocks, the SEC 

stated that the display of limit orders is 

designed, among other objectives, to 

publicize accurate market interest and 

increase quote competition. While the 

SEC recognized that the rule may lead 

to reduced spreads and a diminution in 

market maker profits per trade, the SEC 

also noted that narrower spreads could 

result in increased customer orders and 

volume over time and thus, ultimately 

improve liquidity. FINRA believes that 

extending limit order display 

requirements to OTC Equity Securities 

will improve transparency in the OTC 

equity market. In addition, as has been 

stated by the SEC, the display of 

customer limit orders advances the goal 

of the public availability of quotation 

information, as well as fair competition, 

market efficiency, best execution and 

disintermediation. 

Because the proposed new rules 

provide for significant regulatory 

changes, FINRA plans to implement the 

requirements in two phases to minimize 

the impact on firms. Phase one would 

implement sub-penny quoting 

restrictions, an access fee cap and 

restrictions on locked and crossed 

markets. Phase two would implement 

customer limit order display 

requirements. FINRA will announce the 

implementation dates for the proposed 

rule change in a Regulatory Notice to be 

published no later than 90 days 

following Commission approval. The 

implementation date of Phase one will 

be at least 120 days but no more than 

365 days from the date of Commission 

approval and Phase two will be at least 

90 days following the implementation of 

Phase one, but no more than 365 days 

from the date of 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,16 which 

requires that FINRA rules must be 

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. 

FINRA further believes that the 

proposed rule change is consistent with 

the provisions of 15A(b)(11) of the 

Act,17 which requires, among other 

things, that FINRA rules must govern 

the form and content of quotations 

relating to securities sold otherwise than 

on a national securities exchange and 

require that such rules relating to 

quotations shall be designed to produce 

fair and informative quotations, to 

prevent fictitious or misleading 

quotations, and to promote orderly 

procedures for collecting, distributing, 

and publishing quotations. 

FINRA is proposing to: (1) Restrict 

subpenny quoting; (2) restrict locked 

and crossed markets; (3) implement a 

cap on access fees; and (4) require the 

display of customer limit orders. FINRA 

believes that the proposed restrictions 

on sub-penny quoting will promote 

greater price transparency and 

consistency, reduce the potential harms 

associated with sub-penny quoting in 

OTC equity securities and improve the 

depth and liquidity of this market. 

FINRA believes that locked and 

crossed markets can cause confusion 

among investors concerning trading 

interest in a stock and that restricting 

the practice of submitting locking or 


jlentini on DSKJ8SOYB1PROD with NOTICES
43210 Federal Register / Vol. 74, No. 164 / Wednesday, August 26, 2009 / Notices 

18 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). 

4Changes are marked to the rules of The 

NASDAQ Stock Market LLC found at http:// 

nasdaqomx.cchwallstreet.com. 

crossing quotations will enhance the 

usefulness of quotation information in 

the over-the-counter market, facilitate 

more fair and orderly markets and 

support market efficiency. 

Where wide disparities in access fees 

are permitted, the prices of quotations 

are less useful and accurate. Therefore, 

FINRA believes that a cap on access fees 

would improve the usefulness and 

accuracy of quotations and address the 

potential distortions caused by 

substantial, disparate fees. Finally, 

FINRA believes that applying limit 

order display requirements to OTC 

Equity Securities would improve 

transparency in the OTC equity market 

and advance the goal of the public 

availability of quotation information, as 

well as fair competition, market 

efficiency, best execution and 

disintermediation. 

FINRA believes that the proposed 

extension of the specified Regulation 

NMS protections to quoting and trading 

in OTC Equity Securities will prevent 

fraudulent and manipulative acts and 

practices in this market, promote just 

and equitable principles of trade, and 

protect investors and the public interest. 

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–2009–054 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

Station Place, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–FINRA–2009–054. 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 publicly available. All 

submissions should refer to File 

Number SR–FINRA–2009–054 and 

should be submitted on or before 

September 16, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–20532 Filed 8–25–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60521; File No. SR– 

NASDAQ–2009–076] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

a Proposed Rule Change To Modify 

Processing of Orders on the NASDAQ 

Options Market 

August 18, 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 August 

13, 2009, The NASDAQ Stock Market 

LLC (‘‘Nasdaq’’) 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 

substantially prepared by Nasdaq. 

Nasdaq 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 the Substance 

of the Proposed Rule Change 

The text of the proposed rule change 

is below. Proposed new language is in 

italics; proposed deletions are in 

[brackets].4

* * * * * 

Chapter VI Trading Systems 

Sec. 1 Definitions 

The following definitions apply to 

Chapter VI for the trading of options 

listed on NOM. 

(a)–(d) No change. 

(e) The term ‘‘Order Type’’ shall mean 

the unique processing prescribed for 

designated orders that are eligible for 

entry into the System, and shall include: 

(1)–(7) No Change. 

[(8) ‘‘Additional Exposure Orders’’ are 

orders that are priced at the National 

Best Offer, for buys, and the National 

Best Bid, for sells. The order is exposed 

on the System Book Feed for a time 

determined by the Exchange, not to 

exceed one second. At the end of the 

exposure period, if still unexecuted, the 


jlentini on DSKJ8SOYB1PROD with NOTICES