Federal Register / Vol. 74, No. 181 / Monday, September 21, 2009 / Notices 48115 

6For example, assume the matching algorithm for 

an options class is established so that public 

customer orders have first priority, the modified 

participation entitlement has second priority, and 

any remaining balance is allocated using the prorata matching algorithm. If, at the time of execution, 

there is one or more public customer orders at the 

execution price but none is first in time sequence 

(for instance, because a market-maker quote was the 

first trading interest posted at the execution price), 

then the market-maker participation entitlement 

and public customer priority overlays would not be 

applied and the incoming order would be allocated 

solely on a pro-rata basis. 

7 In approving this proposed rule change, the 

Commission has considered the proposed rule’s 

impact on efficiency, competition, and capital 

formation. See 15 U.S.C. 78c(f). 

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

9See Securities Exchange Act Release No. 51822 

(June 10, 2005), 70 FR 35321 (June 17, 2005) 

(Adopting CBOE Rule 6.45B). 

10 15 U.S.C. 78s(b)(2). 

11 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 60427 

(August 4, 2009), 74 FR 39986 (August 10, 2009) 

(‘‘Notice’’). 

4See Securities Exchange Act Release No. 58183 

(July 17, 2008), 73 FR 42850 (July 23, 

2008). 

5See Securities Exchange Act Release No. 57757 

(May 1, 2008), 73 FR 26159 (May 8, 

2008). 

6Rule 7003(b)(1). 

7Rule 7003(b)(2). 

8See Securities Exchange Act Release No. 59337 

(February 2, 2009), 74 FR 6441 

(February 9, 2009). 

9Rule 7003(b)(3) sets forth an annual fee of $50 

for each registered representative and principal for 

system processing. This annual fee was suspended 

on January 1, 2009 and will continue to be 

suspended until the Exchange submits a proposed 

rule change to reinstate it. See id. See also Notice. 

10 In approving this proposed rule change, the 

Commission has considered the proposed rule’s 

impact on efficiency, competition, and capital 

formation. See 15 U.S.C. 78c(f). 

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

change from how the existing 

participation entitlement works today.6

The Commission has carefully 

reviewed the proposed rule change and 

finds that it is consistent with the 

requirements of the Act and the rules 

and regulations thereunder applicable to 

a national securities exchange.7 In 

particular, the Commission finds that 

the proposed rule change is consistent 

with Section 6(b)(5) of the Act,8 which 

requires, among other things, that the 

rules of an exchange be designed to 

promote just and equitable principles of 

trade, 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; and 

are not designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. 

The new priority overlay is the same 

as the current market-maker 

participation entitlement overlay, 

except that the participation entitlement 

will only be applied if there are no 

public customer orders resting at the 

best price or if a public customer was 

the first to rest interest at the best price. 

Otherwise, neither the current public 

customer priority overlay nor the 

market-maker participation entitlement 

priority overlay will be in effect. Thus, 

public customer orders will have 

priority over the orders of other market 

participants if they are the first orders 

entered at the best price; if they are not 

the first orders at the best price, then the 

order will be allocated among market 

participants using the underlying 

matching algorithm—price-time or prorate—both of which the Commission 

already has found as consistent with the 

Act.9 The Commission therefore 

believes that the modified participation 

entitlement priority overlay is 

consistent with the Act. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,10 that the 

proposed rule change (SR–CBOE–2009– 

052), be, and hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–22683 Filed 9–18–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60668; File No. SR–BX– 

2009–043] 

Self-Regulatory Organizations; 

NASDAQ OMX BX, Inc.; Order 

Approving Proposed Rule Change To 

Extend a Holiday for Certain 

Registration and Processing Fees for 

Associated Persons 

September 14, 2009. 

I. Introduction 

On July 23, 2009, NASDAQ OMX BX, 

Inc. (‘‘Exchange’’), 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 to 

extend a fee holiday for initial 

registration and processing and/or 

transfer and relicensing fees collected 

by the Exchange via Web CRD for the 

registration of associated persons of 

Exchange members. The proposed rule 

change was published for comment in 

the Federal Register on August 10, 

2009.3 The Commission received no 

comments on the proposal. This order 

approves the proposed rule change. 

II. Description of the Proposal 

The Exchange (as the Boston Stock 

Exchange), before its purchase by The 

NASDAQ OMX Group, Inc. in 2008,4

had ceased the trading of equity 

securities in 2007.5 In January 2009, 

when the Exchange’s market center was 

launched, the Exchange adopted a new 

set of Equity Rules, which include rules 

governing fees charged to members for 

registration of associated persons with 

the Exchange. Equity Rule 7003(b) sets 

forth the fees collected by the Exchange 

via the Web CRD system for initial 

registration and transfer or re-licensing: 

$60 for each initial Form U4 filed for the 

registration of a representative or 

principal,6 and $40 for each transfer or 

re-licensing of a representative or 

principal.7

The Exchange recognized that, in 

connection with the resumption of 

equities trading, additional firms might 

wish to become members of the 

Exchange, and if so, would need to 

register associated persons. Similarly, 

additional representatives or principals 

of pre-existing members might wish to 

trade equities on the Exchange and 

would thus need to register with the 

Exchange. Therefore, the Exchange 

waived these initial registration and 

transfer or re-licensing fees from January 

1, 2009 to July 1, 2009.8 The Exchange 

proposed to extend this fee waiver 

period to cover the period from July 1, 

2009 until October 1, 2009, to provide 

more time for associated persons that 

are new to equity trading through the 

Exchange to register, transfer, or relicense without incurring these costs. 

Registration events occurring after 

October 1, 2009 will be subject to the 

initial registration and/or transfer or relicensing fees.9

III. Discussion and Commission 

Findings 

The Commission has reviewed the 

proposed rule change and finds that it 

is consistent with the requirements of 

the Act and the rules and regulations 

thereunder applicable to a national 

securities exchange.10 In particular, the 

Commission finds that the proposed 

rule change is consistent with Section 

6(b)(4) of the Act 11 in that it provides 

for an equitable allocation of reasonable 

dues, fees, and other charges among the 

Exchange’s members and other persons 

using its facilities. The fee waiver 

applies to initial registration, transfer, 

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48116 Federal Register / Vol. 74, No. 181 / Monday, September 21, 2009 / Notices 

12 Id. 

13 15 U.S.C. 78s(b)(2). 

14 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). 

4Securities Exchange Act Release No. 59254 

(January 15, 2009), 74 FR 4271 (January 23, 2009) 

(SR–FINRA–2008–054). 

5 15 U.S.C. 78f. 

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

and re-licensing fees of both 

representatives and principals, and 

therefore applies equally to all 

categories of associated persons who 

would incur fees pursuant to Rule 

7003(b)(1) and (2). In addition, the 

Commission notes that the Exchange 

has been waiving these fees since 

January 1, 2009, and believes waiving 

the fees for an additional three months, 

retroactive from July 1, 2009 until 

October 1, 2009, is a reasonable 

extension of the fee holiday. Based on 

the above, the Commission believes the 

proposed rule change constitutes an 

equitable allocation of reasonable dues, 

fees, and other charges under Section 

6(b)(4) of the Act,12 and is otherwise 

consistent with the requirements of the 

Act. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,13 that the 

proposed rule change (SR–BX–2009– 

043), be, and hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–22685 Filed 9–18–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60662; File No. SR–BX– 

2009–053] 

Self-Regulatory Organizations; 

NASDAQ OMX BX, Inc.; Notice of Filing 

of Proposed Rule Change To Amend 

IM–2110–4 To Reflect Changes to a 

Corresponding FINRA Rule 

September 11, 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 

September 1, 2009, NASDAQ OMX BX, 

Inc. (the ‘‘Exchange’’ or ‘‘BX’’) 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 Exchange has designated the 

proposed rule change as constituting a 

non-controversial rule change 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 Substance of 

the Proposed Rule Change 

The Exchange is filing this proposed 

rule change to amend BX Equity Rule 

IM–2110–4 to reflect recent changes to 

a corresponding rule of the Financial 

Industry Regulatory Authority 

(‘‘FINRA’’). BX will implement the 

proposed rule change thirty days after 

the date of the filing. The text of the 

proposed rule change is available at 

http://nasdaqomxbx.cchwallstreet.com, 

at the Exchange’s principal office, 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 

Many of the Equity Rules adopted by 

BX in conjunction with its resumption 

of the trading of cash equities are based 

on rules of FINRA (formerly the 

National Association of Securities 

Dealers (‘‘NASD’’)). During 2008, FINRA 

embarked on an extended process of 

moving rules formerly designated as 

‘‘NASD Rules’’ into a consolidated 

FINRA rulebook. In most cases, FINRA 

has renumbered these rules, and in 

some cases has substantively amended 

them. Accordingly, BX also proposes to 

initiate a process of modifying its 

rulebook to ensure that BX rules 

corresponding to FINRA/NASD rules 

continue to mirror them as closely as 

practicable. In some cases, it will not be 

possible for the rule numbers of BX 

rules to mirror corresponding FINRA 

rules, because existing or planned BX 

rules make use of those numbers. 

However, wherever possible, BX plans 

to update its rules to reflect changes to 

corresponding FINRA rules. 

This filing addresses BX IM–2110–04, 

which bars trading ahead of research 

reports and which formerly 

corresponded to NASD IM–2110–04. In 

SR–FINRA–2008–054,4 FINRA 

redesignated that rule as FINRA Rule 

5280 and made substantive amendments 

to strengthen and simplify the rule. 

Notably, the amended FINRA rule 

requires FINRA members to establish, 

maintain and enforce policies and 

procedures reasonably designed to 

restrict or limit the flow of information 

between research department personnel 

or other persons with knowledge of the 

content or timing of a research report, 

and trading department personnel. Such 

policies and procedures had formerly 

been recommended but not required. BX 

is adopting the new FINRA rule in full 

(with minor modifications to reflect 

limits on its jurisdiction to regulate nonExchange conduct), but is continuing to 

designate its rule as IM–2110–04 in 

order to maintain the 5000 Series of the 

BX Equity Rules for possible future use. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the provisions of Section 6 of the Act,5

in general, and with Sections 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. The 

proposed changes will conform BX 

Equity Rule IM–2110–04 to recent 

changes made to a corresponding 

FINRA rule, to promote application of 

consistent regulatory standards. 

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, as amended. 

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