45666 Federal Register / Vol. 74, No. 170 / Thursday, September 3, 2009 / Notices 

28 15 U.S.C. 78s(b). 

29See QCT Release, supra note 11 and 

accompanying text. 

30The Commission notes that an original singlesided customer order would not otherwise 

constitute a multi-component, fully hedged trade 

for purposes of ISE’s proposed Qualified Contingent 

Cross Order solely by virtue of being hedged by the 

member representing the order. In such a case, the 

Commission does not believe that the execution of 

the options leg would qualify for the proposed 

Qualified Contingent Cross Order. 

31 15 U.S.C. 78s(b)(2). 

32 17 CFR 200.30–3(a)(12). 

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

2FBMS is designed to enable floor brokers and/ 

or their employees to enter, route, and report 

transactions stemming from options orders received 

on the Exchange. FBMS also is designed to establish 

an electronic audit trail for options orders 

represented and executed by floor brokers on the 

Exchange. See Exchange Rule 1080, commentary 

.06. 

3For purposes of calculating the 100,000 and 

40,000 thresholds, customer-to-customer 

transactions, customer-to-non-customer 

transactions, and non-customer-to-non-customer 

transactions would be included. 

19(b) of the Act 28 and the rules 

thereunder, and that the Commission 

has received and considered the 

comments of those industry participants 

that sought to provide input regarding 

the proposal, including CBOE, a 

competitor of the Exchange, as well as 

SIG, a large participant in the options 

market. 

The Commission believes that the 

Exchange’s proposed new Qualified 

Contingent Cross Order is consistent 

with the Act, and will allow Exchange 

members to retain the flexibility needed 

to utilize the Commission’s NMS QCT 

Exemption for qualified stock-option 

transactions that are not presented as a 

package on an options exchange, but 

instead where the options and stock 

components are executed in separate 

markets. As noted above, the 

Commission believes that contingent 

trades that meet the requirements of the 

NMS QCT Exemption may be useful 

trading tools for investors and other 

market participants, and may be of 

benefit to the market as a whole, 

contributing to the efficient functioning 

of the securities markets and the price 

discovery process.29 The Commission 

believes that, given the NMS QCT 

Exemption, the Exchange’s proposal is 

consistent with the Act in that it seeks 

to address the execution of stock-option 

orders whose legs are executed 

separately rather than as a package 

while limiting such orders to QCTs with 

a size of at least 500 contracts that are 

executed at or between the NBBO.30

In approving the proposed rule 

change, the Commission notes the 

Exchange’s representation that it will 

adopt policies and procedures to ensure 

that its members use the proposed order 

type properly, including requiring 

members to mark all Qualified 

Contingent Cross Orders as such. In 

addition, ISE has represented that it will 

implement surveillance procedures to 

identify that the member executed the 

stock leg of the stock-option transaction 

at or near the same time as the options 

leg. The Commission emphasizes that 

these are important measures that 

should help ensure that the proposed 

order type is employed properly. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,31 that the 

proposed rule changes (SR–ISE–2009– 

35) be, and hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.32

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–21223 Filed 9–2–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60578; File No. SR–Phlx– 

2009–72] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by NASDAQ 

OMX PHLX, Inc. Relating to the Option 

Floor Broker Subsidy and Other 

Clarifying Changes to the Fee 

Schedule 

August 27, 2009. 

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

Securities Exchange Act of 1934,1 notice 

is hereby given that on August 25, 2009, 

NASDAQ OMX PHLX, Inc. (‘‘Phlx’’ 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 the Phlx. The Commission 

is publishing this notice to solicit 

comments on the proposed rule change 

from interested parties. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend the 

calculation for the Options Floor Broker 

Subsidy with respect to waiver of 

transaction fees for firm facilitation 

transactions. 

Additionally, the Exchange proposes 

to make other clarifying changes to the 

fee schedule. 

While changes to the Exchange’s fee 

schedule pursuant to this proposal are 

effective upon filing, the Exchange has 

designated this proposal to be effective 

for trades settling on or after September 

1, 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 

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, 

Phlx 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 Phlx 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 attract additional order flow 

to the Exchange. The Exchange proposes 

to modify the Options Floor Broker 

Subsidy calculation. The Exchange 

currently pays an Options Floor Broker 

Subsidy to member organizations with 

Exchange registered floor brokers for 

eligible contracts that are entered into 

the Exchange’s Options Floor Broker 

Management System (‘‘FBMS’’).2 To 

qualify for the per contract subsidy, a 

member organization with Exchange 

registered floor brokers must have: (1) 

More than an average of 100,000 

executed contracts per day in the 

applicable month; and (2) at least 40,000 

executed contracts or more per day for 

at least eight trading days during that 

same month.3 Only the floor broker 

volume from orders entered into FBMS 

and subsequently executed on the 

Exchange would be counted. The 

100,000 contract and 40,000 contract 

thresholds, as described above, would 

be calculated per member organization 

floor brokerage unit. In the event that 

two or more member organizations with 

Exchange registered floor brokers each 

entered one side of a transaction into 

FBMS, then the executed contracts 

would be divided among each 


pwalker on DSK8KYBLC1PROD with NOTICES
Federal Register / Vol. 74, No. 170 / Thursday, September 3, 2009 / Notices 45667 

4A Floor Broker holding an options order for a 

public customer and a contraside order may cross 

such orders in accordance with paragraph (a) above 

or may execute such orders as a facilitation cross 

in the following manner: (i) The Floor Broker or his 

employees must enter the appropriate notation onto 

the Options Floor Broker Management System for 

the public customer’s order, together with all of the 

terms of the order, including any contingency 

involving other options or the underlying or related 

securities. (ii) The Floor Broker shall request 

markets for the execution of all options components 

of the order. After providing an opportunity for 

such markets to be made, the Floor Broker shall 

announce that he holds an order subject to 

facilitation and shall bid (or offer) in between the 

market for each options component and disclose all 

terms and conditions of the order including all 

securities which are components of the order. (iii) 

After all market participants in the crowd are given 

a reasonable opportunity to accept all terms and 

conditions made on behalf of the public customer 

whose order is subject to facilitation, the Floor 

Broker may immediately thereafter cross all or any 

remaining part of such order and the facilitation 

order at each customer’s bid or offer by announcing 

by public outcry that he is crossing and by stating 

the quantity and price(s). Once a Floor Broker has 

announced an order as subject to facilitation and 

has established a bid (or offer) in between the 

market for the option(s) to be facilitated, the order 

cannot be broken up by a subsequent superior bid 

or offer for just one component to the facilitated 

order. See Exchange Rule 1064(b). 

5See Securities Exchange Act Release No. 60477 

(August 11, 2009), 74 FR 41777 (August 18, 2009) 

(SR–Phlx–2009–67). 

6See Exchange Rule 1064. 

7See Securities Exchange Act Release No. 59402 

(February 13, 2009), 74 FR 8134 (February 23, 2009) 

(SR–Phlx–2009–08) (amending and reformatting the 

existing NASDAQ OMX PHLX Fee Schedule). 

8See Securities Exchange Act Release No. 59402 

(February 13, 2009), 74 FR 8134 (February 23, 2009) 

(SR–Phlx–2009–08). 

9The program took effect on July 1, 2005. See e.g., 

Securities Exchange Act Release Nos.; 57851 (May 

22, 2008), 73 FR 31177 (May 30, 2008) (SR–Phlx– 

2008–38); 55891 (June 11, 2007), 72 FR 333271 

(June 15, 2007) (SR–Phlx–2007–39); 53754 (May 3, 

2006), 71 FR 27301 (May 10, 2006) (SR–Phlx–2006– 

25); 53078 (January 9, 2006), 71 FR 2289 (January 

13, 2006) (SR–Phlx–2005–88); 52568 (October 6, 

2005), 70 FR 60120 (October 14, 2005) (SR–Phlx– 

2005–58); and 52114 (July 22, 2005), 70 FR 44138 

(August 1, 2005) (SR–Phlx–2005–44). 

10 15 U.S.C. 78f(b). 

11 15 U.S.C. 78f(b)(4). 

12 15 U.S.C. 78s(b)(3)(A). 

13 17 CFR 240.19b–4(f)(2). 

qualifying member organization that 

participates in that transaction. In order 

to be eligible for the Options Floor 

Broker Subsidy, the member 

organization must have an average daily 

volume in a particular calendar month 

as follows: 

PER CONTRACT AVERAGE DAILY

VOLUME SUBSIDY PAYMENT

Tier I Tier II Tier III 

100,001 to 

200,000.

200,001 to 

300,000.

300,001 and 

greater. 

$0.04 per contract.$0.05 per contract.$0.06 per 

contract. 

Currently, the following types of 

transactions apply to calculating the 

Options Floor Broker Subsidy: 

• Customer-to-customer executions 

will count towards reaching the 100,000 

contract and 40,000 contract thresholds, 

but a per contract subsidy will not be 

paid on any customer-to-customer 

executions. 

• Orders entered through FBMS but 

executed away through Linkage, as well 

as dividend, merger and short stock 

interest strategies will not count 

towards the 100,000 contract or the 

40,000 contract thresholds nor will a per 

contract subsidy be paid on these 

transactions. 

• Only the largest component of a 

Complex Order (i.e., the component that 

includes the greatest number of 

contracts) will count towards the 

100,000 contract and the 40,000 contract 

thresholds. The Options Floor Broker 

Subsidy does not apply to any contracts 

that are executed as part of a Complex 

Order. 

For the purposes of calculating the 

Options Floor Broker Subsidy, the 

Exchange proposes to treat firm 

facilitation transactions, executed 

pursuant to Exchange Rule 1064,4 in the 

same manner as fees are assessed for 

customer-to-customer executions. The 

Exchange believes that this amendment 

to the Options Floor Broker subsidy 

calculation is consistent with the recent 

waiver of the Firm Proprietary Options 

Transaction Charge on firm facilitation 

transactions.5 The volume for firm 

facilitation transactions would count 

toward reaching the 100,000 and 40,000 

contract thresholds, but a per contract 

subsidy will not be paid on any firm 

facilitation transaction. A facilitation 

occurs when a floor broker holds an 

options order for a public customer and 

a contra-side order for the same option 

series and, after providing an 

opportunity for all persons in the 

trading crowd to participate in the 

transaction, executes both orders as a 

facilitation cross.6

The Exchange also proposes other 

clarifying technical amendments to the 

fee schedule. The Exchange recently 

updated the fee schedule 7 and amended 

certain footnotes in the fee schedule and 

replaced them with endnotes. It was 

previously noted in the fee schedule 

that payment for order flow fees would 

be assessed on transactions resulting 

from customer orders and are available 

to be disbursed by the Exchange 

according to the instructions of the 

specialist units/specialists or Directed 

ROTs to order flow providers who are 

members or member organizations, who 

submit, as agent, customer orders to the 

Exchange or non-members or nonmember organizations who submit, as 

agent, customer orders to the Exchange 

through a member or member 

organization who is acting as agent for 

those customer orders. This language 

was inadvertently removed from the 

previous fee schedule when the fee 

schedule was reformatted,8 however, 

payment for order flow fees have and 

continue to be assessed on transactions 

resulting from customer orders.9 The 

Exchange proposes adding the following 

language back into the fee schedule to 

further clarify the payment for order 

flow fees: ‘‘Payment for order flow fees 

will be assessed on transactions 

resulting from customer orders.’’ Also, 

for purposes of consistency, the 

Exchange proposes amending all 

references to Phlx in the fee schedule to 

be ‘‘PHLX’’ and adding appropriate 

trademark references. 

2. Statutory Basis 

The Exchange believes that its 

proposal to amend its schedule of fees 

is consistent with Section 6(b) of the 

Act 10 in general, and furthers the 

objectives of Section 6(b)(4) of the Act 11

in particular, in that it is an equitable 

allocation of reasonable fees and other 

charges among Exchange members. 

Pursuant to this proposal, all member 

organizations registered as floor brokers 

are offered the continued opportunity to 

receive a subsidy. By allowing for a 

subsidy, the Exchange believes that 

floor brokers will be encouraged to send 

additional orders to the Exchange for 

execution. The Exchange also proposes 

a few technical changes to clarify the 

language in the fee schedule. 

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 either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing rule change 

establishes or changes a due, fee, or 

other charge imposed by the Exchange, 

it has become effective pursuant to 

Section 19(b)(3)(A) of the Act 12 and 

subparagraph (f)(2) of Rule 19b–4 13


pwalker on DSK8KYBLC1PROD with NOTICES
45668 Federal Register / Vol. 74, No. 170 / Thursday, September 3, 2009 / Notices 

14 17 CFR 200.30–3(a)(12). 

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–2009–72 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–Phlx–2009–72. 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 Phlx. 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– 

2009–72 and should be submitted on or 

before September 24, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–21222 Filed 9–2–09; 8:45 am] 

BILLING CODE 8010–01–P 

DEPARTMENT OF STATE 

[Public Notice 6756] 

Culturally Significant Objects Imported 

for Exhibition Determinations: ‘‘Sacred 

Spain: Art and Belief in the Spanish 

World’’ 

SUMMARY: Notice is hereby given of the 

following determinations: Pursuant to 

the authority vested in me by the Act of 

October 19, 1965 (79 Stat. 985; 22 U.S.C. 

2459), Executive Order 12047 of March 

27, 1978, the Foreign Affairs Reform and 

Restructuring Act of 1998 (112 Stat. 

2681, et seq.; 22 U.S.C. 6501 note, et 

seq.), Delegation of Authority No. 234 of 

October 1, 1999, Delegation of Authority 

No. 236 of October 19, 1999, as 

amended, and Delegation of Authority 

No. 257 of April 15, 2003 [68 FR 19875], 

I hereby determine that the objects to be 

included in the exhibition ‘‘Sacred 

Spain: Art and Belief in the Spanish 

World,’’ imported from abroad for 

temporary exhibition within the United 

States, are of cultural significance. The 

objects are imported pursuant to loan 

agreements with the foreign owners or 

custodians. I also determine that the 

exhibition or display of the exhibit 

objects at the Indianapolis Museum of 

Art, Indianapolis, IN, from on or about 

October 11, 2009, until on or about 

January 3, 2010, and at possible 

additional exhibitions or venues yet to 

be determined, is in the national 

interest. Public Notice of these 

Determinations is ordered to be 

published in the Federal Register. 

FOR FURTHER INFORMATION CONTACT: For 

further information, including a list of 

the exhibit objects, contact Carol B. 

Epstein, Attorney-Adviser, Office of the 

Legal Adviser, U.S. Department of State 

(telephone: 202/632–6473). The address 

is U.S. Department of State, SA–5, L/PD, 

Fifth Floor, Washington, DC 20522– 

0505. 

Dated: August 27, 2009. 

Maura M. Pally, 

Deputy Assistant Secretary for Professional 

and Cultural Exchanges, Bureau of 

Educational and Cultural Affairs, Department 

of State. 

[FR Doc. E9–21308 Filed 9–2–09; 8:45 am] 

BILLING CODE 4710–05–P 

DEPARTMENT OF STATE 

[Public Notice 6754] 

Culturally Significant Objects Imported 

for Exhibition Determinations: 

‘‘Playing With Pictures: The Art of 

Victorian Photocollage’’ 

SUMMARY: Notice is hereby given of the 

following determinations: Pursuant to 

the authority vested in me by the Act of 

October 19, 1965 (79 Stat. 985; 22 U.S.C. 

2459), Executive Order 12047 of March 

27, 1978, the Foreign Affairs Reform and 

Restructuring Act of 1998 (112 Stat. 

2681, et seq.; 22 U.S.C. 6501 note, et 

seq.), Delegation of Authority No. 234 of 

October 1, 1999, Delegation of Authority 

No. 236 of October 19, 1999, as 

amended, and Delegation of Authority 

No. 257 of April 15, 2003 [68 FR 19875], 

I hereby determine that the objects in 

the exhibition: ‘‘Playing with Pictures: 

The Art of Victorian Photocollage,’’ 

imported from abroad for temporary 

exhibition within the United States, are 

of cultural significance. The objects are 

imported pursuant to loan agreements 

with the foreign owners or custodians. 

I also determine that the exhibition or 

display of the exhibit objects at The Art 

Institute of Chicago, Chicago, IL, from 

on or about October 10, 2009, until on 

or about January 3, 2010, The 

Metropolitan Museum of Art, New York, 

NY, from on or about February 2, 2010, 

until on or about May 9, 2010, and at 

possible additional exhibitions or 

venues yet to be determined, is in the 

national interest. Public Notice of these 

Determinations is ordered to be 

published in the Federal Register. 

FOR FURTHER INFORMATION CONTACT: For 

further information, including a list of 

the exhibit objects, contact Julie 

Simpson, Attorney-Adviser, Office of 

the Legal Adviser, U.S. Department of 

State (telephone: 202–632–6467). The 

address is U.S. Department of State, 

L/PD, SA–5, 2200 C Street, NW., Suite 

5H03, Washington, DC 20522–0505. 


pwalker on DSK8KYBLC1PROD with NOTICES