Federal Register / Vol. 76, No. 163 / Tuesday, August 23, 2011 / Notices 52727 

4 17 CFR 200.30–3(a)(12). 

establish fair procedures for the nomination 

and election of members of the Board and 

assure fair representation in such 

nominations and elections of public 

representatives, broker dealer 

representatives, bank representatives, and 

advisor representatives. Such rules— 

(i) Shall provide that the number of public 

representatives of the Board shall at all times 

exceed the total number of regulated 

representatives and that the membership 

shall at all times be as evenly divided in 

number as possible between public 

representatives and regulated representatives; 

(ii) Shall specify the length or lengths of 

terms members shall serve; 

(iii) May increase the number of members 

which shall constitute the whole Board, 

provided that such number is an odd 

number; and 

(iv) Shall establish requirements regarding 

the independence of public representatives. 

The MSRB believes the proposed rule 

change is consistent with the Exchange 

Act in that the proposal provides that 

the number of public representatives of 

the Board shall exceed the total number 

of regulated representatives by one so 

that the membership shall be as evenly 

divided as possible between public 

representatives and regulated 

representatives—11 to 10. The proposal 

specifies the length of term that Board 

members will serve—three years— 

which is consistent with the length of 

the terms served by Board members 

prior to the adoption of the Dodd-Frank 

Act. The proposal increases the size of 

the Board from 15 to 21, consistent with 

the size of the Board during the 

transitional period that commenced on 

October 1, 2010. For the reasons 

discussed earlier, the Board believes a 

21-member Board is effective and fairly 

represents all constituencies referenced 

in the Exchange Act, including public 

representatives and regulated 

representatives. Finally, the proposed 

rule change maintains the existing 

requirement regarding the 

independence of public representatives. 

Section 15B(b)(1) of the Exchange Act 

further sets forth minimum 

representation requirements for certain 

categories of public representatives, as 

well as for bank dealer, broker-dealer 

and municipal advisor representatives. 

The proposed rule change complies 

with these requirements. The Exchange 

Act does not, however, mandate the 

specific number of any class of 

representative that should serve on the 

Board, nor does it set forth maximum 

Board composition or representation 

requirements. Thus, the MSRB believes 

that its proposal does provide for fair 

representation of public representatives, 

broker-dealers, bank dealers and 

municipal advisors under the Exchange 

Act, and it believes that providing a 

minimum number of non-dealer 

municipal advisors—at least 30% of the 

regulated representatives—is 

reasonable, and consistent with the 

Exchange Act. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Board 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 since it is solely 

concerned with the administration of 

the MSRB and, in any event, provides 

for fair representation on the Board of 

public representatives, broker dealer 

representatives, bank dealer 

representatives and municipal advisor 

representatives. 

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 on the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period (i) 

as the Commission may designate up to 

90 days of such date if it finds such 

longer period to be appropriate and 

publishes its reasons for so finding or 

(ii) as to which the self-regulatory 

organization consents, the Commission 

will: 

(A) By order approve or disapprove 

such proposed rule change, or 

(B) institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

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–MSRB–2011–11 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–MSRB–2011–11. 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 

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 website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street, NE., 

Washington, DC 20549, on official 

business days between the hours of 10 

am and 3 pm. Copies of such filing also 

will be available for inspection and 

copying at the MSRB’s offices. 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–MSRB–2011–11 and should 

be submitted on or before September 13, 

2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.4

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2011–21557 Filed 8–22–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–65150; File No. SR– 

NASDAQ–2011–113] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

a Proposed Rule Change Regarding 

Clerical Changes to Its Rules 

August 17, 2011. 

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

Securities Exchange Act of 1934 

mstockstill on DSK4VPTVN1PROD with NOTICES

52728 Federal Register / Vol. 76, No. 163 / Tuesday, August 23, 2011 / Notices 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 59663 

(March 31, 2009), 74 FR 15552 (April 6, 2009) (SR– 

NASDAQ–2009–018). 

4 15 U.S.C. 78f. 

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

6 15 U.S.C. 78s(b)(3)(A). 

7 17 CFR 240.19b–4(f)(3). 

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on August 5, 

2011, The NASDAQ Stock Market LLC 

(‘‘NASDAQ’’ or ‘‘Exchange’’) filed with 

the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I and II, which Items have been 

prepared by NASDAQ. 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 the Substance 

of the Proposed Rule Change 

NASDAQ proposes to make clerical 

corrections to correct cross-references 

and a typographical error in Rule 5710 

of the NASDAQ rulebook. NASDAQ 

proposes to implement the proposed 

rule change immediately. 

The text of the proposed rule change 

is available on NASDAQ’s Web site at 

http://www.nasdaq.cchwallstreet.com, 

at NASDAQ’s principal office, on the 

Commission’s Web site at http:// 

www.sec.gov, 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, 

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 proposes to make clerical 

corrections to update certain crossreferences in Rule 5710 and correct a 

typographic error. NASDAQ 

inadvertently failed to change these 

cross-references when the listing rules 

were relocated from the Rule 4000 

Series of the NASDAQ Rulebook to the 

Rule 5000 Series.3 This rule filing will 

correct those cross-references. In 

addition, this rule filing will correct a 

typographic error in the Rule. The 

Exchange is not making any substantive 

changes to Rule 5710. 

2. Statutory Basis 

NASDAQ believes that the proposed 

rule change is consistent with the 

provisions of Section 6 of the Act,4 in 

general, and with Section 6(b)(5) of the 

Act,5 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 rule 

change is consistent with these 

provisions in that it will eliminate 

confusion about NASDAQ rules by 

updating inaccurate cross-references to 

rules that have been renumbered, 

without changing the substance of the 

rules. 

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 

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

Act 6 and Rule 19b–4(f)(3) thereunder,7

NASDAQ has designated this proposal 

as one that is concerned solely with the 

administration of the self-regulatory 

organization. Accordingly, NASDAQ 

believes this proposal should become 

immediately effective. 

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–NASDAQ–2011–113 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–NASDAQ–2011–113. 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 Web site viewing and 

printing 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 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–NASDAQ– 

2011–113 and should be submitted on 

or before September 13, 2011. 

mstockstill on DSK4VPTVN1PROD with NOTICES

Federal Register / Vol. 76, No. 163 / Tuesday, August 23, 2011 / Notices 52729 

8 17 CFR 200.30–3(a)(12). 

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

2See Securities Exchange Act Release No. 64788 

(July 1, 2011), 76 FR 40415 (‘‘Notice’’). 

3See Securities Exchange Act Release No. 63860 

(February 7, 2011), 76 FR 7888 (February 11, 2011) 

(SR–Phlx–2010–176). 

4The Commission previously approved the 

listing and trading of options on Alpha Indexes 

based on the following Alpha Pairs: AAPL/SPY, 

AMZN/SPY, CSCO/SPY, F/SPY, GE/SPY, GOOG/ 

SPY, HPQ/SPY, IBM/SPY, INTC/SPY, KO/SPY, 

MRK/SPY, MSFT/SPY, ORCL/SPY, PFE/SPY, 

RIMM/SPY, T/SPY, TGT/SPY, VZ/SPY and WMT/ 

SPY. See supra note 3. In connection with its 

proposed rule change to list and trade this initial 

set of Alpha Index options, the Exchange 

represented that it would not list Alpha Index 

options on any other Alpha Pairs without filing a 

proposed rule change seeking Commission 

approval. See id. 

5Rule 1009A(f) requires that options on Alpha 

Indexes meet the following criteria: (1) Alpha Index 

options will be A.M.-settled. The exercise 

settlement value will be based upon the opening 

prices of the individual stock or ETF from the 

primary listing market on the last trading day prior 

to expiration (usually a Friday); (2) at the time of 

listing an Alpha Index option, options on each 

underlying component of an Alpha Index will also 

be listed and traded on the Exchange and will meet 

the requirements of Rule 1009, Criteria for 

Underlying Securities. Additionally, each 

underlying component’s trading volume (in all 

markets in which the underlying security is traded) 

must have averaged at least 2,250,000 shares per 

day in the preceding twelve months; (3) following 

the listing of an Alpha Index option, options on 

each of the component securities of the Alpha Index 

will continue to meet the continued listing 

standards set forth by Phlx Rule 1010, Withdrawal 

of Approval of Underlying Securities or Options. 

Additionally, each underlying component’s trading 

volume (in all markets in which the underlying 

security is traded) must have averaged at least 

2,000,000 shares per day in the preceding twelve 

months; and (4) no Alpha Index option will be 

listed unless and until options overlying each of the 

Alpha Index component securities have been listed 

and traded on a national securities exchange with 

an average daily options trading volume during the 

three previous months of at least 10,000 contracts. 

Following the listing of an Alpha Index option, 

options on each of the component securities of the 

Alpha Index must continue to meet this options 

average daily volume standard. 

6The Exchange will not, however, list options on 

any such Alpha Pairs without filing a proposed rule 

change seeking Commission approval. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.8

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2011–21466 Filed 8–22–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–65149; File No. SR–Phlx– 

2011–89] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX LLC; Order 

Granting Approval of Proposed Rule 

Change Relating to Alpha Index 

Options 

August 17, 2011. 

I. Introduction 

On June 23, 2011, NASDAQ OMX 

PHLX LLC (the ‘‘Exchange’’ or ‘‘Phlx’’) 

filed with the Securities and Exchange 

Commission (the ‘‘Commission’’), 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 a proposed rule change to list 

and trade options on a number of new 

Alpha Indexes and to amend Exchange 

Rule 1001A, Position Limits, with 

respect to certain Alpha Index options. 

The proposed rule change was 

published for comment in the Federal 

Register on July 8, 2011.2 The 

Commission received no comment 

letters on the proposed rule change. 

This order approves the proposed rule 

change. 

II. Description 

On February 7, 2011, the Commission 

approved the Exchange’s proposed rule 

change to list and trade options on a 

number of Alpha Indexes.3 Alpha 

Indexes measure relative total returns of 

one underlying stock or exchange traded 

fund (‘‘ETF’’) share against another 

underlying stock or ETF share 

underlying options which are also 

traded on the Exchange (each such 

combination of two components is 

referred to as an ‘‘Alpha Pair’’). The first 

component identified in an Alpha Pair 

(the ‘‘Target Component’’) is measured 

against the second component identified 

in the Alpha Pair (the ‘‘Benchmark 

Component’’). Total return measures 

performance (rate of return) of price 

appreciation plus dividends over a 

given evaluation period. 

The Alpha Index options that the 

Commission has previously approved 

for listing and trading on the Exchange 

are limited to specific Alpha Indexes the 

Target Component of which is a single 

stock.4 The Exchange proposes to 

expand the number of Alpha Indexes on 

which options can be listed to include 

certain Alpha Indexes based on the 

following Alpha Pairs: DIA/SPY, EEM/ 

SPY, EWJ/SPY, EWZ/SPY, FXI/SPY, 

GLD/SPY, IWM/SPY, QQQ/SPY, SLV/ 

SPY, TLT/SPY, XLE/SPY and XLF/SPY. 

In these Alpha Indexes, the Target 

Component as well as the Benchmark 

Component is an ETF share. The 

proposed Alpha Index options will 

enable investors to trade the relative 

performance of the market sectors 

represented by the Target Components 

as compared with the overall market 

performance represented by the 

Benchmark Component SPY. 

As with each initial Alpha Index 

option, each proposed new Alpha Index 

option will meet the criteria set forth in 

Exchange Rule 1009A(f).5 Further, 

following the listing of these Alpha 

Index options, options on each of the 

component securities of the Alpha 

Index must continue to meet the 

continued listing standards set forth by 

Exchange Rule 1010, Withdrawal of 

Approval of Underlying Securities or 

Options. 

Position Limits 

The Exchange also proposes to amend 

section (f) of Exchange Rule 1001A to 

establish a 15,000 contract position 

limit in options on Alpha Indexes in 

which the Target Component is an ETF 

share. This 15,000 contract position 

limit would apply not only to the 

specific Alpha Index options proposed 

herein, but also to any options the 

Exchange may list in the future on 

Alpha Indexes in which the Target 

Component is an ETF share.6 For 

purposes of determining compliance 

with position limits, positions in Alpha 

Index options will be aggregated with 

positions in equity options on the 

underlying securities. All position limit 

hedge exemptions will apply. 

Clearing 

Like the Alpha Index options that are 

currently trading, the proposed new 

Alpha Index options are ‘‘Strategy Based 

Options’’ that will be cleared by the 

Options Clearing Corporation. 

Surveillance 

Surveillance for opening price 

manipulation will be in place for the 

launch of these new Alpha Index 

options and other existing surveillance 

patterns will be utilized to monitor 

trading in these options. The Exchange 

represents that these surveillance 

procedures are adequate to monitor the 

trading of the new Alpha Index options. 

For surveillance purposes, the Exchange 

will have complete access to 

information regarding trading activity in 

the pertinent underlying securities and 

options thereon. 

Margin 

The Exchange will set customer 

margin levels for the new Alpha Index 

options at the higher of the margin 

required for options on the Target 

Component or the margin required for 

options on the Benchmark Component. 

Systems Capacity 

Additionally, the Exchange affirms 

that it possesses the necessary systems 

capacity to support new series that 

would result from the introduction of 

these new Alpha Index options. The 

mstockstill on DSK4VPTVN1PROD with NOTICES