45504 Federal Register / Vol. 74, No. 169 / Wednesday, September 2, 2009 / Notices 

15 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). 

4Nasdaq filed separate proposals to create flash 

orders that ultimately could be routed to other 

markets, and flash orders that would cancel back to 

the entering party. See SR–NASDAQ–2009–043 and 

SR–NASDAQ–2009–048. This filing eliminates both 

versions of these orders, with both types referred to 

herein collectively as Flash Orders. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–21165 Filed 9–1–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60570; File No. SR– 

NASDAQ–2009–079] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

a Proposed Rule Change To Eliminate 

Flash Orders 

August 26, 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 

21, 2009, The NASDAQ Stock Market 

LLC (‘‘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 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. Nasdaq will implement 

the proposed rule change on September 

1, 2009. 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 

Nasdaq proposes a rule change to 

eliminate Flash Orders.4 The text of the 

proposed rule change is below. 

Proposed new language is italicized; 

proposed deletions are in brackets. 

4750. Nasdaq Market Center-Execution 

Services 

4751. Definitions 

The following definitions apply to the 

Rule 4600 and 4750 Series for the 

trading of securities listed on Nasdaq or 

a national securities exchange other 

than Nasdaq. 

(a) through (e) No Change. 

(f) 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)–(10) No Change. 

(11) Reserved [‘‘Flash and Cancel 

Orders’’ are market or marketable limit 

orders which are to be executed in 

whole or in part immediately upon 

receipt by the System with any unfilled 

balance being displayed to Nasdaq 

market participants (and market data 

vendors) for potential execution for a 

period of time not to exceed one-half of 

one second. If any unfilled balance 

remains after such display, such 

marketable unfilled balance shall be 

cancelled back to the entering party, and 

such nonmarketable unfilled balance 

shall be retained by the System for 

potential execution. The System will 

provide an electronic method to 

distinguish the Flash Order during the 

flash period from the System’s protected 

quote under Regulation NMS.] 

(12)–(13) No Change. 

(g) through (i) No Change. 

* * * * * 

4758. Order Routing 

(a) Order Routing Process 

(1) The Order Routing Process shall be 

available to Participants from 7:00 a.m. 

until 8:00 p.m. Eastern Time, and shall 

route orders as described below: All 

routing of orders shall comply with Rule 

611 of Regulation NMS under the 

Exchange Act. 

(A) The System provides three routing 

options. Of these three, DOT is only 

available for orders ultimately sought to 

be directed to either the New York Stock 

Exchange (‘‘NYSE’’) or NYSE Amex. 

The System will consider the quotations 

only of accessible markets and will 

provide an electronic method to 

distinguish orders displayed during a 

prerouting display period from the 

System’s protected quote under 

Regulation NMS. The three System 

routing options are: 

(i) DOT (‘‘DOT’’)—under this option, 

after checking the System for available 

shares if so instructed by the entering 

firm, orders are sent to other available 

market centers for potential execution, 

per entering firm’s instructions, before 

being sent to the destination exchange, 

so long as the price at such market 

centers would not violate the Order 

Protection Rule. [If instructed by the 

entering firm, prior to sending orders to 

other available markets, such orders 

shall be displayed to Nasdaq market 

participants (and market data vendors) 

for potential execution, at the NBBO 

price, for a period of time not to exceed 

one-half of one second as determined by 

Nasdaq.] Any un-executed portion will 

thereafter be sent to the NYSE or NYSE 

Amex, as appropriate, at the order’s 

original limit order price. This option 

may only be used for orders with timein-force parameters of either SDAY, 

SIOC, MDAY, MIOC, GTMC or marketon-open/close. Notwithstanding the 

foregoing, orders designated for 

participation in the NYSE or NYSE 

Amex opening or closing processes will 

not check the System for available 

shares prior to routing. 

(ii) Reactive Electronic Only 

(‘‘STGY’’)—under this option, after 

checking the System for available shares 

if so instructed by the entering firm, 

orders are sent to other available market 

centers for potential execution, per 

entering firm’s instructions. When 

checking the book, the System will seek 

to execute at the price it would send the 

order to a destination market center. [If 

instructed by the entering firm, prior to 

sending orders to other available 

markets, such orders shall be displayed 

to Nasdaq market participants (and 

market data vendors) for potential 

execution, at the NBBO price, for a 

period of time not to exceed one-half of 

one second as determined by Nasdaq.] 

If shares remain un-executed after 

routing, they are posted on the book. 

Once on the book, should the order 

subsequently be locked or crossed by 

another accessible market center, the 

System shall route the order to the 

locking or crossing market center. With 

the exception of the Minimum Quantity 

order type, all time-in-force parameters 

and order types may be used in 

conjunction with this routing option. 

(iii) Electronic Only Scan (‘‘SCAN’’)— 

under this option, after checking the 

System for available shares if so 

instructed by the entering firm, orders 

are sent to other available market 

centers for potential execution, per 

entering firm’s instructions, in 

compliance with Rule 611 under 

Regulation NMS. When checking the 

book, the System will seek to execute at 

the price it would send the order to a 

destination market center. [If instructed 

by the entering firm, prior to sending 

orders to other available markets, such 

orders shall be displayed to Nasdaq 

market participants (and market data 

vendors) for potential execution, at the 

NBBO price, for a period of time not to 

exceed one-half of one second as 

determined by Nasdaq.] If shares remain 

un-executed after routing, they are 

posted on the book. Once on the book, 

should the order subsequently be locked 

or crossed by another market center, the 


jlentini on DSKJ8SOYB1PROD with NOTICES
Federal Register / Vol. 74, No. 169 / Wednesday, September 2, 2009 / Notices 45505 

5 15 U.S.C. 78f. 

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

7 15 U.S.C. 78s(b)(3)(A). 

8 17 CFR 240.19b–4(f)(6). 

9 17 CFR 240.19b–4(f)(6)(iii). In addition, Rule 

19b-4(f)(6)(iii) requires that a self-regulatory 

organization submit to the Commission 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. Nasdaq has satisfied this requirement. 

10 Id. 

11See SR–NASDAQ–2009–079, Item 7. 

12For the 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). 

System will not route the order to the 

locking or crossing market center. With 

the exception of the Minimum Quantity 

order type, all time-in-force parameters 

and order types may be used in 

conjunction with this routing option. 

Orders that do not check the System 

for available shares prior to routing may 

not be sent to a facility of an exchange 

that is an affiliate of Nasdaq, except for 

orders that are sent to the NASDAQ 

OMX BX Equities Market. 

(B) No Change. 

(b) No Change. 

* * * * * 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

Nasdaq 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. Nasdaq 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 implemented Flash Orders on 

June 5, 2009. Upon further review, 

Nasdaq proposes to eliminate Flash 

Orders effective September 1, 2009. 

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 Section 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. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

Nasdaq 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, as amended. 

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 

Because the foregoing rule change 

does not: (1) Significantly affect the 

protection of investors or the public 

interest; (2) impose any significant 

burden on competition; and (3) become 

operative for 30 days after the date of 

this filing, or such shorter time as the 

Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 7 and Rule 19b– 

4(f)(6) thereunder.8

A proposed rule change filed under 

Rule 19b–4(f)(6) normally may not 

become operative prior to 30 days after 

the date of filing.9 However, Rule 19b– 

4(f)(6)(iii) 10 permits the Commission to 

designate a shorter time if such action 

is consistent with the protection of 

investors and the public interest. 

Nasdaq has requested that the 

Commission waive the 30-day operative 

delay. Nasdaq requests this waiver so as 

to allow it to eliminate Flash Orders on 

September 1, 2009.11 Based on the 

foregoing, the Commission believes that 

waiving the 30-day operative delay is 

consistent with the protection of 

investors and the public interest and 

hereby designates the proposal 

operative on September 1, 2009.12

At any time within 60 days of the 

filing of such 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 

No. SR–NASDAQ–2009–079 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–NASDAQ–2009–079. 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 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 No. 

SR–NASDAQ–2009–079 and should be 

submitted on or before September 23, 

2009. 


jlentini on DSKJ8SOYB1PROD with NOTICES
45506 Federal Register / Vol. 74, No. 169 / Wednesday, September 2, 2009 / Notices 

13 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(6). 

5See SR–NYSE–2009–86. 

6See Securities Exchange Act Release No. 58673 

(September 29, 2008), 73 FR 57707 (October 3, 

2008) (SR–NYSE–2008–60 and SR–Amex–2008–62) 

(approving the Merger). 

7NYSE Alternext US LLC was subsequently 

renamed NYSE Amex LLC. See Securities Exchange 

Act Release No. 59575 (March 13, 2009), 74 FR 

11803 (March 19, 2009) (SR–NYSEALTR–2009–24). 

8 15 U.S.C. 78f. 

9See Securities Exchange Act Release No. 58705 

(October 1, 2008), 73 FR 58995 (October 8, 2008) 

(SR–Amex 2008–63) (approving the Equities 

Relocation). 

10See Securities Exchange Act Release No. 58705 

(October 1, 2008), 73 FR 58995 (October 8, 2008) 

(SR–Amex 2008–63) (approving the Equities 

Relocation); Securities Exchange Act Release No. 

58833 (October 22, 2008), 73 FR 64642 (October 30, 

2008) (SR–NYSE–2008–106) and Securities 

Exchange Act Release No. 58839 (October 23, 2008), 

73 FR 64645 (October 30, 2008) (SR–NYSEALTR– 

2008–03) (together, implementing the Bonds 

Relocation); Securities Exchange Act Release No. 

59022 (November 26, 2008), 73 FR 73683 

(December 3, 2008) (SR–NYSEALTR–2008–10) 

(adopting amendments to NYSE Alternext Equities 

Rules to track changes to corresponding NYSE 

Rules); Securities Exchange Act Release No. 59027 

(November 28, 2008), 73 FR 73681 (December 3, 

2008) (SR–NYSEALTR–2008–11) (adopting 

amendments to Rule 62—NYSE Alternext Equities 

to track changes to corresponding NYSE Rule 62). 

11See Securities Exchange Act Release No. 58845 

(October 24, 2008), 73 FR 64379 (October 29, 2008) 

(SR–NYSE–2008–46) (approving certain rules to 

operate as a pilot scheduled to end October 1, 

2009.) 

12 In an opening and reopening trade, the Display 

Book® (‘‘Display Book’’) will verify that all interest 

that must be executed in the opening or reopening 

can be executed at the price chosen by the DMM. 

If all the interest that must be executed in the 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–21162 Filed 9–1–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60574; File No. SR– 

NYSEAmex–2009–58] 

Self-Regulatory Organizations; NYSE 

Amex LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Extending the Length of 

Time That Exchange Systems Transmit 

Odd-Lot Order-by-Order Information to 

the DMM Unit Algorithm Prior to the 

Opening Transaction From August 31, 

2009 to October 31, 2009 

August 26, 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 

21, 2009, NYSE Amex LLC (‘‘Exchange’’ 

or ‘‘NYSE Amex’’) 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 self-regulatory organization. The 

Exchange designated the proposal 

eligible for immediate effectiveness 

pursuant to Section 19(b)(3)(A) of the 

Act 3 and Rule 19b–4(f)(6) thereunder.4

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 extend the 

length of time that Exchange systems 

transmit odd-lot order-by-order 

information to the DMM unit algorithm 

prior to the opening transaction from 

August 31, 2009 to October 31, 2009. 

The text of the proposed rule change is 

available at the Exchange, the 

Commission’s Public Reference Room, 

and http://www.nyse.com. 

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 

self-regulatory organization 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 those 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 parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

NYSE Amex LLC (‘‘NYSE Amex’’ or 

the ‘‘Exchange’’), formerly the American 

Stock Exchange LLC, proposes to extend 

the length of time that Exchange 

systems transmit odd-lot order-by-order 

information to the DMM unit algorithm 

prior to the opening transaction from 

August 31, 2009 to October 31, 2009. 

The Exchange notes that parallel 

changes are proposed to be made to the 

rules of New York Stock Exchange LLC 

(‘‘NYSE’’).5

Background 

As described more fully in a related 

rule filing, 6 NYSE Euronext acquired 

The Amex Membership Corporation 

(‘‘AMC’’) pursuant to an Agreement and 

Plan of Merger, dated January 17, 2008 

(the ‘‘Merger’’). In connection with the 

Merger, the Exchange’s predecessor, the 

American Stock Exchange LLC 

(‘‘Amex’’), a subsidiary of AMC, became 

a subsidiary of NYSE Euronext called 

NYSE Alternext US LLC, 7 later renamed 

NYSE Amex LLC (hereinafter referred to 

as ‘‘NYSE Amex’’) and continues to 

operate as a national securities exchange 

registered under Section 6 of the 

Securities Exchange Act of 1934, as 

amended (the ‘‘Act’’).8 The effective 

date of the Merger was October 1, 2008. 

In connection with the Merger, on 

December 1, 2008, the Exchange 

relocated all equities trading conducted 

on the Exchange legacy trading systems 

and facilities located at 86 Trinity Place, 

New York, New York, to trading systems 

and facilities located at 11 Wall Street, 

New York, New York (the ‘‘Equities 

Relocation’’). The Exchange’s equity 

trading systems and facilities at 11 Wall 

Street (the ‘‘NYSE Amex Trading 

Systems’’) are operated by the NYSE on 

behalf of the Exchange.9

As part of the Equities Relocation, the 

Exchange adopted NYSE Rules 1–1004, 

subject to such changes as necessary to 

apply the Rules to the Exchange, as the 

NYSE Alternext Equities Rules, now 

renamed NYSE Amex Equities Rules, to 

govern trading on the NYSE Amex 

Trading Systems.10 The NYSE Amex 

Equities Rules, which became operative 

on December 1, 2008, are substantially 

identical to the current NYSE Rules 1– 

1004 and the Exchange continues to 

update the NYSE Amex Equities Rules 

as necessary to conform with rule 

changes to corresponding NYSE Rules 

filed by the NYSE. 

Included in the adoption of the NYSE 

Rules was the adoption and operation of 

the NYSE’s New Market Model Pilot 

(‘‘Pilot’’) approved by the Securities and 

Exchange Commission (‘‘SEC or 

‘‘Commission’’) on October 24, 2008.11

As part of the original Pilot filing, the 

NYSE explained that although the 

Designated Market Maker (‘‘DMM’’) 

would no longer receive order-by-order 

information, there would continue to be 

certain times when human interaction 

was essential to market quality and 

maintaining a fair and orderly market. 

Currently the DMM is responsible for 

facilitating the opening transaction and 

ultimately determines the price,12 and 


jlentini on DSKJ8SOYB1PROD with NOTICES