52282 Federal Register / Vol. 74, No. 195 / Friday, October 9, 2009 / Notices 

23 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release Nos. 60405 

(July 20, 2009) (National Market System Plan 

Relating to Options Order Protection and Locked/ 

Crossed Markets). 

4See Securities Exchange Act Release No. 60363 

(July 22, 2009), 74 FR 37270 (July 28, 2009) (SR– 

Phlx–2009–61). Linkage was governed by the 

Options Linkage Authority under the conditions set 

forth under the Plan for the Purpose of Creating and 

Operating an Intermarket Option Linkage approved 

by the Commission. The registered U.S. options 

markets are linked together on a real-time basis 

through a network capable of transporting orders 

and messages to and from each market. 

5See footnote 4. 

6See footnote 4. 

7See footnote 4. 

8See footnote 4. 

9See Securities Exchange Act Release No. 60209 

(July 1, 2009), 74 FR 33006 (July 9, 2009) (SR–Phlx– 

2009–55). 

10The Exchange uses the terms ‘‘specialists’’ and 

‘‘specialists units’’ interchangeably herein. 

11See Exchange Rule 1080. 

12FBMS 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 trails for options orders 

represented and executed by Floor Brokers on the 

Exchange, such that the audit trail provides an 

accurate, time-sequenced record of electronic and 

other orders, quotations and transactions on the 

Exchange, beginning with the receipt of an order by 

the Exchange, and further documenting the life of 

the order through the process of execution, partial 

execution, or cancellation of that order. See 

Exchange Rule 1080, Commentary .06. 

13A P/A Order is an order for the principal 

account of a specialist (or equivalent entity on 

another participant exchange that is authorized to 

represent Public Customer orders), reflecting the 

terms of a related unexecuted Public Customer 

order for which the specialist is acting as agent. See 

Exchange Rule 1088, a temporary linkage rule. 

14See Securities Exchange Act Release Nos. 

58234 (July 25, 2008), 73 FR 45263 (August 4, 2008) 

(SR–Phlx–2008–55); 56101 (July 19, 2007), 72 FR 

40920 (July 25, 2007) (SR–Phlx–2009–50 [sic]); 

54257 (August 1, 2006), 71 FR 45089 (August 8, 

2006) (SR–Phlx–2006–46); 53761 (May 5, 2006), 71 

FR 27768 (May 12, 2006) (SR–Phlx–2006–20). 

be submitted on or before October 30, 

2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.23

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–24356 Filed 10–8–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60771; File No. SR–Phlx– 

2009–85] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX, Inc.; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to the 

Discontinuation of the Specialist Fee 

Credit Pilot Program 

October 2, 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 24, 2009, NASDAQ OMX 

PHLX, Inc. (‘‘Phlx’’ or ‘‘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 Exchange proposes to 

discontinue its current pilot program 

relating to specialist fee credits for 

linkage orders. 

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 

on September 28, 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, 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 

change is to discontinue the current 

pilot program related to a specialist fee 

credit for linkage is because the pilot is 

no longer necessary. On June 17, 2008, 

the Exchange filed an executed copy of 

the Options Order Protection and 

Locked/Crossed Market Plan (‘‘Plan’’), 

joining all other approved options 

markets in adopting the Plan.3 The Plan 

requires each options exchange to adopt 

rules implementing various 

requirements specified in the Plan.4 The 

Plan replaces the Plan for the Purpose 

of Creating and Operating an 

Intermarket Option Linkage (‘‘Linkage 

Plan’’).5 That Plan requires its 

participant exchanges to operate a 

stand-alone system or ‘‘Linkage’’ for 

sending order-flow between exchanges 

to limit trade-throughs.6 The Options 

Clearing Corporation (‘‘OCC’’) operates 

the Linkage system (the ‘‘System’’).7 The 

Exchange adopted various new rules in 

connection with the Plan to avoid tradethroughs and locked markets, among 

other things.8 The Exchange currently 

offers private routing as opposed to 

utilizing the Linkage Plan for routing. In 

light of this change, the Exchange 

proposes to terminate the specialist 

option transaction charge credit pilot 

program for trades executed via 

Intermarket Options Linkage 

(‘‘Linkage’’) as the credit will no longer 

be necessary since the specialists will 

no longer utilize Linkage to route trades. 

The current pilot, which is set to 

expire on July 31, 2010,9 relates to: (1) 

An option transaction charge credit of 

$0.21 per contract for Exchange 

specialist units 10 that incur options 

transaction charges when a customer 

order is delivered electronically via 

Phlx XL 11 or via the Exchange’s Options 

Floor Broker Management Systems 

(‘‘FBMS’’) 12 and then is executed via 

the Linkage as a Principal Acting as 

Agent Order (‘‘P/A Order’’) 13; and (2) 

the Floor Broker Linkage P/A fee and 

Options Specialist Unit Credit, which 

charges floor brokers an amount equal to 

the transaction fee(s) assessed on 

options specialist units by another 

exchange in connection with customer 

orders that are delivered to the limit 

book via FBMS and executed via 

Linkage as P/A Orders. The Exchange 

provides to options specialists units a 

credit in an amount equal to the 

transaction fee(s) assessed on them by 

another exchange in connection with 

executing customer orders that are 

delivered to the limit order book via 

FBMS and executed via Linkage as P/A 

Orders. The current pilot program has 

been in effect for several years.14

The pilot program which relates to 

transaction fees applicable to the 

execution of P/A Orders and Principal 

mstockstill on DSKH9S0YB1PROD with NOTICES

Federal Register / Vol. 74, No. 195 / Friday, October 9, 2009 / Notices 52283 

15A principal Order is an order for the principal 

account of an Eligible Market Maker and is not a 

P/A Order. See Exchange Rule 1088. 

16See Securities Exchange Act Release No. 59891 

(May 8, 2009), 74 FR 22990 (May 15, 2009) (SR– 

Phlx–2009–24). 

17Currently, the Exchange has a temporary 

linkage rule, Exchange Rule 1088, which provides 

that the Exchange will continue to accept P and P/ 

A Orders from options exchanges that continue to 

use such orders to address trade-throughs via the 

existing linkage for a temporary period. See 

Securities Exchange Act Release No. 60363 (July 22, 

2009), 74 FR 37270 (July 28, 2009) (SR–Phlx–2009– 

61). See also Exchange Rule 1088. 

18 15 U.S.C. 78f(b). 

19 15 U.S.C. 78f(b)(4). 

20 15 U.S.C. 78s(b)(3)(A)(ii). 

21 17 CFR 240.19b–4(f)(2). 

22 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

Orders (‘‘P Orders’’) 15 sent to the 

Exchange via Linkage pursuant to the 

Linkage Plan 16 will remain in effect 

until such time as all participant 

exchanges to the Linkage Plan no longer 

send Linkage P or P/A orders via the 

Linkage Plan. At such time the 

Exchange intends to file a proposed rule 

change with the Commission to request 

the discontinuation of that pilot as 

well.17

2. Statutory Basis 

The Exchange believes that its 

proposal to amend its schedule of fees 

is consistent with Section 6(b) of the 

Act 18 in general, and furthers the 

objectives of Section 6(b)(4) of the Act 19

in particular, in that it is an equitable 

allocation of reasonable fees and other 

charges among Exchange members. In 

particular, the Exchange believes that 

the pilot program is no longer necessary 

because the specialists no longer utilize 

Linkage to route trades. 

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 that is not 

necessary or appropriate in furtherance 

of the purposes of the Exchange 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 

The foregoing proposed rule change is 

effective upon filing pursuant to Section 

19(b)(3)(A)(ii) of the Act 20 and Rule 

19b–4(f)(2) thereunder,21 because it 

establishes or changes a due, fee, or 

other charge applicable only to a 

member imposed by the Exchange. 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-2009–85 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–2009–85. 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, on official business days between 

the hours of 10 a.m. and 3 p.m. Copies 

of such filing will also 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 No. SR–Phlx–2009– 

85 and should be submitted on or before 

October 30, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.22

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–24352 Filed 10–8–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60784; File No. SR–Phlx– 

2009–69] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX, Inc.; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Prohibit 

Options Specialist Commission 

Charges 

October 2, 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 October 

1, 2009, NASDAQ OMX PHLX, Inc. 

(‘‘Phlx’’ or ‘‘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 Exchange proposes to adopt Rule 

1014, Commentary .10 to establish that 

options specialists on the Exchange are 

prohibited from charging commissions. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://www.nasdaqtrader.com/ 

micro.aspx?id=PHLXRulefilings, 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, 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 

mstockstill on DSKH9S0YB1PROD with NOTICES