49818 Federal Register / Vol. 76, No. 155 / Thursday, August 11, 2011 / Notices 

17 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4The NYSE Arca System is configured to 

automatically reject a QCC entered when the order 

is for less than 1,000 contracts, is entered at a price 

worse than the national best bid or offer (‘‘NBBO’’) 

or is entered at the same price as Customer orders 

in the Exchange’s Consolidated Book. 

5See Securities Exchange Act Release No. 64688 

(June 16, 2011), 76 FR 36606 (June 22, 2011) (SR– 

Phlx–2011–56). 

6See Securities Exchange Act Release No. 64086 

(March 17, 2011), 76 FR 16021 (March 22, 2011) 

(SR–NYSEArca–2011–09) (‘‘NYSE Arca Electronic 

QCC Filing’’). 

7A QCT is a transaction consisting of two or more 

component orders, executed as agent or principal, 

where: (a) At least one component is an NMS stock, 

as defined in Rule 600 of Regulation NMS under the 

Exchange Act; (b) all components are effected with 

a product or price contingency that either has been 

agreed to by all the respective counterparties or 

arranged for by a broker-dealer as principal or 

agent; (c) the execution of one component is 

contingent upon the execution of all other 

components at or near the same time; (d) the 

specific relationship between the component orders 

(e.g., the spread between the prices of the 

component orders) is determined by the time the 

contingent order is placed; (e) the component 

orders bear a derivative relationship to one another, 

represent different classes of shares of the same 

issuer, or involve the securities of participants in 

mergers or with intentions to merge that have been 

announced or cancelled; and (f) the transaction is 

fully hedged (without regard to any prior existing 

position) as a result of other components of the 

contingent trade. See Securities Exchange Act 

Release No. 57620 (April 4, 2008), 73 FR 19271 

(April 9, 2008) (the ‘‘QCT Release’’). That release 

superseded a release initially granting the QCT 

exemption. See Securities Exchange Act Release 

No. 54389 (August 31, 2006), 71 FR 52829 

(September 7, 2006) (‘‘Original QCT Exemption’’). 

8See Securities Exchange Act Release No. 63955 

(February 24, 2011), 76 FR 11533 (March 2, 2011) 

(SR–ISE–2010–73) (‘‘ISE Approval’’). See also 

Securities Exchange Act Release No. 62523 (July 16, 

2010), 75 FR 43211 (July 23, 2010) (SR–ISE–2010– 

73) (‘‘ISE QCC Proposal’’). 

9The Exchange notes that letters commenting on 

the ISE Proposal were submitted on its behalf by the 

Exchange’s parent company, NYSE Euronext. See 

e.g., letters dated August 9, 2010 and October 21, 

2010 from Janet L. McGinness, Senior Vice 

President—Legal & Corporate Secretary, Legal & 

Government Affairs, NYSE Euronext. 

10First, the Exchange requires OTP Holders to 

properly mark all QCCs as such. In addition, the 

Financial Industry Regulatory Authority (‘‘FINRA’’), 

on behalf of the Exchange, has implemented an 

examination and surveillance program to assess 

OTP Holder compliance with the requirements 

applicable to QCCs, including the requirement that 

the stock leg of the transaction be executed at or 

near the same time as the options leg. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2011–20390 Filed 8–10–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–65048; File No. SR– 

NYSEArca–2011–52] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Amending NYSE Arca 

Options Rule 6.90 To Permit Qualified 

Contingent Cross Orders To Be 

Electronically Submitted to the NYSE 

Arca System From the Floor of the 

Exchange for Potential Execution 

August 5, 2011. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that on August 1, 

2011, NYSE Arca, Inc. (the ‘‘Exchange’’ 

or ‘‘NYSE Arca’’) filed with the 

Securities and Exchange Commission 

(the ‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the self-regulatory organization. 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 amend 

NYSE Arca Options Rule 6.90 to permit 

Qualified Contingent Cross Orders 

(‘‘QCCs’’) to be electronically submitted 

to the NYSE Arca System from the Floor 

of the Exchange for potential execution. 

The text of the proposed rule change 

is available at the Exchange’s Web site 

at http://www.nyse.com, on the 

Commission’s Web site at http:// 

www.sec.gov, 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 

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 

The purpose of this filing is to amend 

Rule 6.90 to permit QCCs to be 

electronically submitted to the NYSE 

Arca System from the Floor of the 

Exchange for potential execution.4 This 

filing is modeled after a recently 

approved rule change by NASDAQ 

OMX PHLX (‘‘PHLX’’).5

Background 

The Exchange recently adopted rules 

that permit OTP Holders to submit 

QCCs electronically from off the Floor 

through the NYSE Arca System.6 The 

QCC permits an NYSE Arca OTP Holder 

to effect a qualified contingent trade 

(‘‘QCT’’) in a Regulation NMS stock and 

cross the options leg of the trade on the 

Exchange immediately upon entry and 

without order exposure if the order is 

for at least 1,000 contracts, is part of a 

QCT, is executed at a price at least equal 

to the NBBO and if there are no 

Customer Orders in the Exchange’s 

Consolidated Book at the same price.7

The NYSE Arca Electronic QCC Filing 

was based on an International Securities 

Exchange (‘‘ISE’’) rule approved by the 

Commission.8 The ISE QCC Proposal 

was controversial, attracting opposition 

from multiple exchanges including 

NYSE Arca.9 The Commission, 

however, ultimately approved the ISE 

QCC Proposal, finding it to be consistent 

with the Securities Exchange Act of 

1934 (the ‘‘Act’’). NYSE Arca 

implemented the NYSE Arca Electronic 

QCC Filing, and is proposing this rule 

change, as a competitive response to the 

approval of the PHLX floor-based QCC 

filing. 

Under the NYSE Arca Electronic QCC 

Filing, QCCs currently may only be 

submitted electronically from off the 

Floor through the NYSE Arca System. In 

this regard, OTP Holders on the Floor of 

the Exchange are not allowed to enter 

QCCs into the NYSE Arca System, or 

otherwise effect them in open outcry. To 

provide a mechanism for the Exchange 

to surveil for whether QCCs were 

entered from off of the Floor, the 

Exchange adopted Commentary .01 to 

Rule 6.90, which requires OTP Holders 

to maintain books and records 

demonstrating that each QCC was 

routed to the NYSE Arca System from 

off of the Floor. Presently, any QCC that 

does not have a corresponding record 

required by this provision would be 

deemed to have been entered from on 

the Floor in violation of Rule 6.90. In 

addition, the Exchange has adopted 

policies and procedures to ensure that 

OTP Holders use the QCC properly.10

Discussion 

QCCs permit OTP Holders to provide 

their customers a net price for the entire 


srobinson on DSK4SPTVN1PROD with NOTICES
Federal Register / Vol. 76, No. 155 / Thursday, August 11, 2011 / Notices 49819 

11 In order to satisfy the 1,000-contract 

requirement, a QCC must be for 1,000 contracts and 

could not be, for example, two 500-contract orders 

or two 500-contract legs. 12The Exchange does not propose to change the 

definition of ‘‘Qualified Contingent Cross Order’’ in 

NYSE Arca Rule 6.62. Thus, like QCCs effected 

pursuant to the NYSE Arca Electronic QCC Filing, 

QCCs entered from the Floor would need to meet 

the requirements of NYSE Arca Rule 6.62 and 

Commentary .02 of that rule. Additionally, QCCs 

entered from the Floor by a Floor Broker would be 

entered electronically into the NYSE Arca System 

where a systemic check would be performed to 

determine whether a Customer Order is resting on 

the Exchange’s Consolidated Book at the same price 

as the QCC, whether the order was for less than 

1,000 contracts or whether the execution price 

would be outside the NBBO, each of which would 

cause the QCC to be rejected. If, however, the QCC 

is not rejected, then the NYSE Arca System would 

execute the QCC and simultaneously assign it an 

execution time. 

13As proposed, only Floor Brokers would be 

permitted to enter QCCs from on the Floor and 

QCCs would not be permitted in open outcry. 

14See 15 U.S.C. 78k(a). 

15See 17 CFR 240.11a2–2(T). 

16See, e.g. Securities Exchange Act Release No. 

54238 (July 28, 2006), 71 FR 44758 (August 7, 2006) 

(SR–NYSEArca–2006–13). 

17This restriction is the same as the one found 

in PHLX Rule 1064(e)(2). 

trade, and then allow the OTP Holder to 

execute the options leg of the trade on 

the Exchange at a price at least equal to 

the NBBO while using the QCT 

exemption to effect the trade in the 

equities leg at a price necessary to 

achieve the net price. 

The Exchange hereby proposes to 

permit QCCs to be electronically entered 

from the Floor of the Exchange by Floor 

Brokers and executed immediately upon 

entry without exposure into the NYSE 

Arca System provided that no Customer 

Orders exist on the Exchange’s 

Consolidated Book at the execution 

price, that the order is for at least 1,000 

contracts,11 and that the execution price 

is at or between the NBBO.12 QCCs 

entered from the Floor of the Exchange 

would be electronically entered into the 

NYSE Arca System by a Floor Broker.13

The impact of this proposal, coupled 

with the NYSE Arca Electronic QCC 

Filing, would be that OTP Holders 

would be able to enter QCCs both on 

and off of the Floor. The Exchange 

therefore proposes to eliminate the 

requirements from NYSE Arca Rule 6.90 

that QCCs only be submitted 

electronically from off the Floor to the 

NYSE Arca System and from 

Commentary .01 to NYSE Arca Rule 

6.90 that OTP Holders maintain books 

and records demonstrating that each 

QCC was routed to the NYSE Arca 

System from off of the Floor, as both 

will no longer be necessary if QCCs are 

available for entry from the Floor. 

The Commission in the ISE Approval 

carefully considered the comparison 

between floor-based and electronic 

trading, including commissioning a 

study by the Division of Risk, Strategy 

and Financial Innovation (‘‘RiskFin 

Study’’). The RiskFin Study and the ISE 

Approval compare electronic trading 

and floor trading, the similarities 

between the two forms of trading, and 

the ability of one to replicate the other. 

Additionally, the Commission received 

comment letters from multiple floorbased exchanges that challenged the 

comparison that ISE drew between 

floor-based and electronic trading. 

Despite facing direct comparisons 

between floor-based trading and 

electronic trading by multiple 

commenters, as well as by its own 

Division of RiskFin, the ISE Approval 

focuses on similarities between the two. 

The Exchange believes that the ISE 

Approval, on its face, draws no 

distinctions and identifies no material 

differences between floor-based and 

electronic trading that would confound 

the comparison between cross orders 

entered electronically and those entered 

on an exchange floor. The Exchange 

believes that its proposal to permit the 

entry of QCCs from the Floor is 

consistent with the requirements stated 

in the ISE Approval and consistent with 

the Act. The Exchange also believes that 

the Commission, in issuing the ISE 

Approval, assumed that QCC orders 

entered on the floor of an exchange that 

meet the requirements stated in the ISE 

Approval are equally consistent with 

the Act. 

The Exchange has analyzed the 

application of Section 11(a) of the Act, 

and the rules thereunder, to QCCs 

entered from the Floor. Section 11(a) 

and the rules thereunder generally 

prohibit members of an exchange from 

effecting transactions on the exchange 

for their own account, the account of an 

associated person, or an account with 

respect to which it or an associated 

person thereof exercises investment 

discretion unless an exemption 

applies.14 Section 11(a) contains 

multiple exemptions, including 

exemptions for dealers acting in the 

capacity of market makers, odd-lot 

dealers, and firms engaged in stabilizing 

conduct; there are also rule-based 

exemptions such as the ‘‘effect vs. 

execute’’ exception under SEC Rule 

11a2–2(T) under the Act.15

The Exchange has in the past 

analyzed the application of Section 

11(a) to various Exchange systems and 

order types.16 The Exchange believes 

that the entry and execution of QCCs 

from the Floor raises no novel issues 

under Section 11(a) and the rules 

thereunder from a compliance, 

surveillance or enforcement perspective. 

In other words, OTP Holders on the 

Floor are currently required to comply 

and are subject to review for compliance 

with Section 11(a), and the rules 

thereunder, when using Exchange 

systems to effect transactions using 

existing order types, and they will be 

required to comply with Section 11(a) 

and the rules thereunder when entering 

QCCs from the Floor. 

Nonetheless, out of an abundance of 

caution, the Exchange proposes to 

amend Commentary .01 to NYSE Arca 

Rule 6.90 to prohibit Floor Brokers from 

entering QCCs from the Floor for their 

own accounts, the account of an 

associated person, or an account with 

respect to which it or an associated 

person thereof exercises investment 

discretion (each a ‘‘prohibited 

account’’).17

These restrictions set forth in 

Commentary .01 to NYSE Arca Rule 

6.90 would not limit in any way the 

obligation of OTP Holders, on the Floor 

or otherwise, to comply with Section 

11(a) or the rules thereunder. For 

example, Floor Brokers cannot avoid or 

circumvent their obligations under 

Section 11(a) with respect to a QCC 

entered from the Floor by transmitting 

that order to another OTP Holder on the 

Floor or to an OTP Holder off the Floor 

of the Exchange. Likewise, OTP Holders 

off the Floor must ensure that their 

QCCs comply with Section 11(a) and the 

rules thereunder. In both cases, OTP 

Holders must ensure compliance with 

Section 11(a) and the rules thereunder, 

including by relying upon an exemption 

such as those listed above. 

Additionally, to provide a mechanism 

for the Exchange to review whether 

QCCs have been entered properly by 

Floor Brokers, the Exchange proposes to 

further amend Commentary .01 to NYSE 

Arca Rule 6.90 to require OTP Holders 

on the Floor to maintain books and 

records demonstrating that no QCC was 

entered from the Floor by the OTP 

Holder in a prohibited account. Any 

QCC entered from the Floor that does 

not have a corresponding record 

required by this provision would be 

deemed to have been entered in 

violation of Commentary .01 to NYSE 

Arca Rule 6.90. 

The Exchange also proposes to amend 

Commentary .01 to NYSE Arca Rule 

6.90 to clarify that NYSE Arca Rule 6.47 

does not apply when Floor Brokers are 

executing QCCs. The Exchange is 

making this clarification to eliminate 

any confusion about whether the 

various crossing provisions in Rule 6.47 

may apply to QCCs when they are 


srobinson on DSK4SPTVN1PROD with NOTICES
49820 Federal Register / Vol. 76, No. 155 / Thursday, August 11, 2011 / Notices 

18This change is modeled after the changes to 

PHLX Rule 1064(a), (b) and (c). 

19The Exchange also is clarifying that 

Commentary .02 would not apply to a Qualified 

Contingent Cross Order covered by Commentary .01 

to NYSE Arca Rule 6.90 (i.e., a Qualified Contingent 

Cross Order routed to a Floor Broker for entry into 

the NYSE Arca System). 

20 15 U.S.C. 78f(b). 

21 15 U.S.C. 78f(b)(5). 

22 15 U.S.C. 78f(b)(8). 

23 15 U.S.C. 78k–1(a)(1)(C). 

24See ISE Approval at 11540. 

25 Id. 

26See ISE Approval at 11541. 

27 15 U.S.C. 78s(b)(3)(A)(iii). 

28 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6) requires a self-regulatory organization to give 

the Commission written notice of its intent to file 

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. The Exchange has complied with this 

requirement. 

executed by Floor Brokers.18 In 

addition, the Exchange is moving a 

recordkeeping obligation from current 

Commentary .01 to Commentary 02 and 

modifying it to require that with respect 

to QCCs routed to the NYSE Arca 

System from off of the Floor, OTP 

Holders must maintain books and 

records demonstrating that each such 

order was routed to the system from off 

of the Floor.19 Finally, the Exchange is 

adding Commentary .03 to NYSE Arca 

Rule 6.90 to clarify that the order 

exposure requirements found in NYSE 

Arca Rule 6.47A do not apply to QCCs. 

That rule generally provides that with 

respect to orders routed to the NYSE 

Arca System, OTP Holders may not 

execute as principal orders they 

represent as agent unless such orders 

are first exposed on the Exchange for at 

least one second. 

The Exchange’s proposal addresses 

the mechanics of executing the stock 

and options components of a net-price 

transaction. The Exchange believes that 

it is necessary that it provide OTP 

Holders and their customers with the 

same trading capabilities available on 

other exchanges with respect to QCCs, 

including the change proposed herein, 

which would permit OTP Holders to 

execute the options legs of their 

customers’ large complex orders on the 

Exchange. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with Section 

6(b) of the Act,20 in general, and furthers 

the objectives of Section 6(b)(5) 21 and 

6(b)(8) of the Act,22 in particular, 

because it is designed to promote just 

and equitable principles of trade, 

remove impediments to and perfect the 

mechanisms of a free and open market 

and a national market system and, in 

general, to protect investors and the 

public interest and does not impose any 

burden on competition not necessary or 

appropriate in furtherance of the 

purposes of the Act. The proposed rule 

change is consistent with the protection 

of investors in that it is designed to 

prevent Trade-Throughs. In addition, 

the proposed rule change would 

promote a free and open market by 

permitting the Exchange to compete 

with other exchanges for these types of 

orders. In this regard, competition 

would result in benefits to the investing 

public, whereas a lack of competition 

would serve to limit the choices that the 

public has for execution of their options 

business. 

In addition, the proposed rule change 

is consistent with Section 11A(a)(1)(C) 

of the Act,23 in which Congress found 

that it is in the public interest and 

appropriate for the protection of 

investors and the maintenance of fair 

and orderly markets to assure, among 

other things, the economically efficient 

execution of securities transactions. As 

described in detail above, the proposed 

rule change is also consistent with 

Section 11(a) of the Act and the rules 

thereunder. 

The Exchange believes, similar to the 

Commission’s basis for finding that 

ISE’s QCC proposal was consistent with 

the Act, that permitting the entry of 

QCCs from the Floor ‘‘would facilitate 

the execution of qualified contingent 

trades, for which the Commission found 

in the Original QCT Exemption to be of 

benefit to the market as a whole, 

contributing to the efficient functioning 

of the securities markets and the price 

discovery process.’’ 24 Further, 

permitting the entry of QCCs from the 

Floor ‘‘would provide assurance to 

parties to stock-option [QCTs] that their 

hedge would be maintained by allowing 

the options component to be executed 

as a clean cross.’’ 25 In addition, like the 

ISE QCC Proposal, the Exchange’s 

proposal to permit the entry of QCCs 

from the Floor ‘‘is narrowly drawn and 

establishes a limited exception to the 

general principle of exposure, and 

retains the general principle of customer 

priority in the options markets.’’ 26

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 Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The Exchange has filed the proposed 

rule change pursuant to Section 

19(b)(3)(A)(iii) of the Act 27 and Rule 

19b–4(f)(6) thereunder.28 Because the 

proposed rule change does not: 

(i) Significantly affect the protection of 

investors or the public interest; 

(ii) impose any significant burden on 

competition; and (iii) become operative 

prior to 30 days from the date on which 

it was filed, or such shorter time as the 

Commission may designate, if 

consistent with the protection of 

investors and the public interest, the 

proposed rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act and Rule 19b–4(f)(6)(iii) 

thereunder. 

At any time within 60 days of the 

filing of such proposed rule change, the 

Commission summarily may 

temporarily suspend 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–NYSEArca–2011–52 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–NYSEArca–2011–52. This 

file number should be included on the 

subject line if e-mail is used. To help the 

Commission process and review your 


srobinson on DSK4SPTVN1PROD with NOTICES
Federal Register / Vol. 76, No. 155 / Thursday, August 11, 2011 / Notices 49821 

29 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 No. 63780 

(January 26, 2011), 76 FR 5846 (February 2, 2011) 

(SR–Phlx–2011–07). 

4The Exchange released SQF 6.0 on October 11, 

2010. The Exchange anticipates that member 

organizations will utilize both SQF 5.0 and SQF 6.0 

for a period of time. SQF 6.0 will increase efficiency 

for interested participants by allowing them to 

access in a single feed available to all participants, 

rather than through accessing multiple feeds, 

information such as execution reports and other 

relevant data. In order for participants to access all 

of this information currently or for any that do not 

use SQF 6.0 in the future, they must rely on a risk 

management feed and the TOPO/TOPO Plus Orders 

Exchange interfaces. Non quoting firms that would 

like to receive the relevant information available 

over SQF will be allowed to connect to the SQF 

interface, but not send quotes. Data proposed for 

SQF 6.0 will initially include the following: (1) 

Options Auction Notifications (e.g., opening 

imbalance, market exhaust, PIXL or other 

information currently provided on SQF 5.0); (2) 

Options Symbol Directory Messages (currently 

provided on SQF 5.0); (3) System Event Messages 

(e.g., start of messages, start of system hours, start 

of quoting, start of opening); (4) Complex Order 

Strategy Auction Notifications (COLA); (5) Complex 

Order Strategy messages; (6) Option Trading Action 

Messages (e.g., halts, resumes); and (7) Complex 

Strategy Trading Action Message (e.g., halts, 

resumes). See Securities Exchange Act Release No. 

63034 (October 4, 2010), 75 FR 62441 (October 8, 

2010) (SR–Phlx–2010–124). 

5For purposes of the Active SQF Port Fee, a Phlx 

Only Member is a Phlx member that is not a 

member or member organization of another national 

securities exchange. 

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

7 15 U.S.C. 78f(b)(4). 

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 Web site viewing and 

printing in the Commission’s Public 

Reference Section, 100 F Street, NE., 

Washington, DC 20549–1090 on official 

business days between the hours of 10 

a.m. and 3 p.m. Copies of the 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 Number SR– 

NYSEArca–2011–52 and should be 

submitted on or before September 1, 

2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.29

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2011–20389 Filed 8–10–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–65046; File No. SR–Phlx– 

2011–105] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to the 

Active SQF Port Fee 

August 5, 2011. 

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 2, 

2011, NASDAQ OMX PHLX LLC 

(‘‘Phlx’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘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 amend the 

Exchange’s Fee Schedule to extend the 

Active Specialized Quote Feed (‘‘SQF’’) 

Port Fee monthly cap from its current 

expiration of November 30, 2011 3 to 

December 30, 2011. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://nasdaqtrader.com/ 

micro.aspx?id=PHLXfilings, 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 extend the timeframe for 

member organizations to cap their 

Active SQF Port Fees in order that they 

will have additional time to transition 

from SQF 5.0 to SQF 6.0.4 Active SQF 

ports refer to ports that receive inbound 

quotes at any time within that month. 

SQF is an interface that enables 

specialists, Streaming Quote Traders 

(‘‘SQTs’’) and Remote Streaming Quote 

Traders (‘‘RSQTs’’) to connect and send 

quotes into Phlx XL. 

The Exchange currently has a tiered 

Active SQF Port Fee as follows: 

Number of Active SQF 

Ports 

Cost Per Port Per 

Month 

0–4 .................................. 350 

5–18 ................................ 1,250 

19–40 .............................. 2,350 

41 and over .................... 3,000 

Active SQF Port Fees are capped at 

$500 per month for member 

organizations that are (i) Phlx Only 

Members; 5 and (ii) have 50 or less SQT 

assignments affiliated with their 

member organization. Currently, Active 

SQF Port Fees are capped at $40,000 per 

month (‘‘Cap’’) until November 30, 2011 

for all member organizations other than 

those member organizations who meet 

the requirements of the $500 per month 

cap. The purpose of the Cap is to ensure 

member organizations are not assessed 

fees in excess of the Active SQF Port 

Fees. 

The Exchange proposes to extend the 

Cap until December 30, 2011 because 

the Exchange believes that member 

organizations would require additional 

time to properly transition to SQF 6.0 

ports. On January 2, 2012, there will no 

longer be a Cap in effect for the Active 

SQF Port Fee. No other changes are 

proposed with respect to Active SQF 

Port Fees. 

2. Statutory Basis 

The Exchange believes that its 

proposal to amend its Fee Schedule is 

consistent with Section 6(b) of the Act 6

in general, and furthers the objectives of 

Section 6(b)(4) of the Act 7 in particular, 

in that it is an equitable allocation of 

reasonable fees and other charges among 


srobinson on DSK4SPTVN1PROD with NOTICES