Federal Register / Vol. 77, No. 4 / Friday, January 6, 2012 / Notices 829 

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

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(1). 

4 17 CFR 240.19b–4. 

5The Exchange has entered into a license 

agreement with MSCI Inc. to list this product. 

6FLEX options are flexible exchange-traded 

index, equity, or currency option contracts that 

provide investors the ability to customize basic 

option features including size, expiration date, 

exercise style, and certain exercise prices. FLEX 

index options may have expiration dates within five 

years. See Exchange Rules 1079 and 1101A. 

7LEAPS or Long Term Equity Anticipation 

Securities are long term options that generally 

expire from twelve to thirty-nine months from the 

time they are listed. 

8The Commission has previously approved the 

listing and trading of an exchange-traded fund 

based on the MSCI EM Index. See Securities 

Exchange Act Release Nos. 44900 (October 25, 

2001) 66 FR 55712 (November 2, 2001) (SR–Amex– 

2001–45) and 44990 (October 25, 2001), 66 FR 

56869 (November 13, 2001) (SR–Amex–2001–45) 

(approving the listing and trading of shares of a 

fund based on the MSCI EM Index, among other 

indexes). The Commission also approved options 

on Volatility Indexes comprised of options on the 

iShares MSCI Emerging Markets Index Fund 

(‘‘EEM’’). See Securities Exchange Act Release No. 

64551 (May 26, 2011), 76 FR 32000 (June 2, 2011) 

(SR–CBOE–2011–026). The MSCI EM ETF is one of 

the twenty most actively traded ETFs. 

9The free float adjusted market capitalization is 

used to calculate the weights of the securities in the 

indices. MSCI defines the free float of a security as 

the proportion of shares outstanding that is deemed 

to be available for purchase in the public equity 

markets by international investors. 

10MSCI is a provider of investment decision 

support tools. 

11Additional information about the methodology 

for calculating the MSCI EM Index can be found at: 

http://www.msci.com/eqb/methodology/meth_docs/ 

MSCI_May11_GIMIMethod.pdf. 

12A divisor is an arbitrary number chosen at the 

starting date of an index to fix the index starting 

value. The divisor is adjusted periodically when 

capitalization amendments are made to the 

constituents of the index in order to allow the index 

value to remain comparable over time. Without a 

divisor the index value would change when 

corporate actions took place and would not reflect 

the true value of an underlying portfolio based 

upon the index. 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66077; File No. SR–Phlx– 

2011–179] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX LLC; Notice of 

Filing of Proposed Rule Change 

Relating to the MSCI EM Index 

January 3, 2012. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on December 

21, 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 and 

II 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, pursuant to Section 

19(b)(1) of the Act 3 and Rule 19b–4 

thereunder,4 proposes to amend 

Exchange Rules 1079, 1009A and 

1101A, to list and trade new options on 

the MSCI EM Index based upon the Full 

Value MSCI Emerging Markets (‘‘EM’’) 

Index (‘‘Full Value MSCI EM Index’’).5

The Exchange also proposes to create 

a new Rule 1108A entitled ‘‘MSCI EM 

Index’’ which provides additional 

detailed information pertaining to the 

index as required by the licensor. 

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 

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 amend Exchange Rules 

1079 (FLEX Index, Equity and Currency 

Options), 1009A (Designation of the 

Index) and 1101A (Terms of Option 

Contracts) to list and trade P.M. cashsettled, European-style options, 

including FLEX 6 options and LEAPS,7

on the MSCI EM Index. Specifically, the 

Exchange proposes to list and trade 

long-term options on the Full Value 

MSCI EM Index (‘‘MSCI EM LEAPS’’).8

The Exchange also proposes to create a 

new Rule 1108A entitled ‘‘MSCI EM 

Index’’ which provides additional 

detailed information pertaining to the 

index as required by the licensor 

including, but not limited to, liability 

and other representations on the part of 

MSCI Inc. 

The MSCI EM Index is a free floatadjusted market capitalization index9

that is designed to measure equity 

market performance of emerging 

markets. The MSCI EM Index consists of 

component securities from the following 

twenty-one (21) emerging market 

countries: Brazil, Chile, China, 

Colombia, Czech Republic, Egypt, 

Hungary, India, Indonesia, Korea, 

Malaysia, Mexico, Morocco, Peru, 

Philippines, Poland, Russia, South 

Africa, Taiwan, Thailand, and Turkey. 

Index Design and Composition 

The MSCI EM Index is designed to 

measure equity market performance in 

the global emerging markets. The Index 

is maintained by MSCI, Inc. (‘‘MSCI’’).10

The Index was launched on December 

31, 1987. 

The MSCI EM Index is reviewed on a 

semi-annual basis. The index review is 

based on MSCI’s Global Investable 

Markets Indices Methodology. A 

description of the methodology is 

available at http://www.msci.com/eqb/ 

methodology/meth_docs/ 

MSCI_May11_GIMIMethod.pdf. The 

MSCI EM Index consists of large and 

midcap components from countries 

classified by MSCI as ‘‘emerging 

markets.’’ 

Index Calculation and Index 

Maintenance 

The base index value of the MSCI EM 

Index was 100, as of December 31, 1987. 

On June 1, 2011 the index value of the 

MSCI EM Index was 1166.72. The MSCI 

EM Index is calculated in U.S. Dollars 

on a real time basis from the open of the 

first market on which the components 

are traded to the closing of the last 

market on which the components are 

traded. The methodology used to 

calculate the value of the MSCI EM 

Index is similar to the methodology 

used to calculate the value of other wellknown market-capitalization weighted 

indexes.11 The level of the MSCI EM 

Index reflects the free float-adjusted 

market value of the component stocks 

relative to a particular base date and is 

computed by dividing the total market 

value of the companies in each index by 

its respective index divisor.12

Static data is distributed daily to 

clients through MSCI as well as through 

major quotation vendors, including 

Bloomberg L.P. (‘‘Bloomberg’’), FactSet 

Research Systems, Inc. (‘‘FactSet’) and 

Thomson Reuters (‘‘Reuters’’). Real time 

data is distributed at least every 15 

seconds using MSCI’s real-time 


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13See proposed Exchange Rule 1009A(g)(i)(2). 

14See Exchange Rule 1000A(b)(11), which 

defines a broad-based index as an index designed 

to be representative of a stock market as a whole 

or of a range of companies in unrelated industries. 

15The settlement value of a P.M. settled index 

option is based on closing prices of the component 

securities. 16The Exchange’s Gold/Silver SectorSM Index 

(‘‘XAU’’) is a P.M. settled capitalization-weighted 

index. 

17Late prices indicates [sic] that while the last 

real-time stock tick comes in at 4 p.m. E.S.T., the 

index will stay open for another few minutes to 

allow any late price information to be obtained. At 

4:30 p.m. E.S.T. the final foreign currency rates are 

applied and the last real-time index value is 

disseminated. 

18NYSE Liffe futures based on the MSCI EM 

Index utilize these P.M. closing prices. 

19See generally Exchange Rules 1000A through 

1107A (Rules Applicable to Trading Options on 

Indices) and Exchange Rules 1000 through 1094 

(Rules Applicable to Trading of Options on Stocks, 

Exchange-Traded Fund Shares and Foreign 

Currencies). 

20See Exchange Rules 721 (Proper and Adequate 

Margin) and 1047A (Trading Rotations, Halts or 

Reopenings). 

21The exercise limits would also be 25,000 

contracts as per Exchange Rule 1002A. 

22See Exchange Rule 721. 

calculation engine to Reuters, 

Bloomberg, SIX Telekurs and FactSet. 

The MSCI EM Index is monitored and 

maintained by MSCI. Adjustments to 

the MSCI EM Index are made on a daily 

basis with respect to corporate events 

and dividends. The MSCI EM Index is 

generally updated on a quarterly basis 

in February, May, August and 

November of each year to reflect 

amendments to shares outstanding and 

free float and full index reviews are 

conducted on a semi-annual basis in 

May and November of each year for 

purposes of rebalancing the index. 

Exercise and Settlement Value 

The settlement value for expiring 

options on the MSCI EM Index would 

be based on the closing prices of the 

component stocks on the last trading 

day prior to expiration, usually a Friday. 

The last trading day for expiring 

contracts is the last business day prior 

to expiration, usually the third Friday of 

the expiration month. The index 

multiplier is $100. The Options Clearing 

Corporation would be the issuer and 

guarantor. 

Contract Specifications 

The MSCI EM Index is a broad-based 

index, as defined in Exchange Rule 

1000A. Options on the MSCI EM Index 

would be European-style and P.M. cashsettled.13 The Exchange’s standard 

trading hours for index options (9:30 

a.m. to 4:15 p.m. E.T. (Philadelphia 

Time)), as set forth in Exchange Rules 

101 and 1101A at Commentary .01, 

would apply to options on the MSCI EM 

Index. The expiration date for this index 

is the Saturday following the third 

Friday of the expiration month. 

The Exchange also notes that the 

MSCI EM Index is a broad-based index 

as defined in Exchange Rule 

1000A(b)(11).14 In addition, the 

Exchange proposes to create specific 

listing and maintenance standards for 

options on the MSCI EM Index in 

Exchange Rule 1009A(g). Specifically, 

in proposed Rule 1009A(g)(i)(1) through 

(10) the Exchange proposes to require 

that the following conditions are 

satisfied: (1) The index is broad-based, 

as defined in Rule 1000A(b)(11); (2) 

Options on the index are designated as 

P.M.-settled index options; (3) The 

index is capitalization-weighted, priceweighted, modified capitalizationweighted or equal dollar-weighted; (4) 

The index consists of 500 or more 

component securities; (5) All of the 

component securities of the index will 

have a market capitalization of greater 

than $100 million; (6) No single 

component security accounts for more 

than fifteen percent (15%) of the weight 

of the index, and the five highest 

weighted component securities in the 

index do not, in the aggregate, account 

for more than fifty percent (50%) of the 

weight of the MSCI EM Index; (7) NonU.S. component securities (stocks or 

ADRs) that are not subject to 

comprehensive surveillance agreements 

do not, in the aggregate, represent more 

than twenty-two and a half percent 

(22.5%) of the weight of the index; (8) 

The current index value is widely 

disseminated at least once every fifteen 

(15) seconds by one or more major 

market data vendors during the time 

options on the index are traded on the 

Exchange; (9) The Exchange reasonably 

believes it has adequate system capacity 

to support the trading of options on the 

index, based on a calculation of the 

Exchange’s current Independent System 

Capacity Advisor (ISCA) allocation and 

the number of new messages per second 

expected to be generated by options on 

such index; and (10) The Exchange has 

written surveillance procedures in place 

with respect to surveillance of trading of 

options on the index. 

Additionally, the Exchange proposes 

to require the following maintenance 

requirements, as set forth in proposed 

Rule 1009A, for the MSCI EM Index 

options: (1) The conditions set forth in 

subparagraphs (g)(i)(1), (2), (3), (4), (7), 

(8), (9) and (10) must continue to be 

satisfied. The conditions set forth in 

subparagraphs (g)(i)(5) and (6), must be 

satisfied only as of the first day of 

January and July in each year; and (2) 

the total number of component 

securities in the index may not increase 

or decrease by more than thirty-five 

percent (35%) from the number of 

component securities in the index at the 

time of its initial listing. 

The Exchange believes that the 

modified initial listing requirements are 

appropriate for trading options on the 

MSCI EM Index for various reasons. The 

Exchange believes that a P.M. 

settlement 15 is appropriate given the 

nature of this index, which 

encompasses multiple markets around 

the world.16 Specifically, the MSCI EM 

Index components open with the start of 

trading in Asia at 7 p.m. E.T. (prior day) 

and closes with the end of trading in 

Mexico and Peru at 4 p.m. E.T. (the next 

day) as closing prices from Brazil, Chile, 

Peru and Mexico, including late 

prices,17 are accounted for in the closing 

calculation. The closing index level 

value is distributed by MSCI around 6 

p.m. EST each trading day.18 The index 

has a higher market capitalization 

requirement than other broad based 

indexes. The MSCI EM Index currently 

contains more than 800 components and 

no single component comprises more 

than 3% to 5% of the index, making it 

not easily subject to market 

manipulation. Therefore, because the 

MSCI EM Index has a large number of 

component securities, representative of 

many countries, and trades a large 

volume with respect to ETFs today, the 

Exchange believes that the initial listing 

requirements are appropriate to trade 

options on this index. In addition, 

similar to other broad based indexes, the 

Exchange proposes various maintenance 

requirements, which require continual 

compliance and periodic compliance. 

Exchange Rules that apply to the 

trading of options on broad-based 

indexes also would apply to options on 

the Full Value MSCI EM Index.19 The 

trading of these options also would be 

subject to, among others, Exchange 

Rules governing margin requirements 

and trading halt procedures for index 

options.20 The Exchange would apply 

the same position limits as exist today 

for broad-based index options, namely 

25,000 contracts on the same side of the 

market for the MSCI EM Index option.21

All position limit hedge exemptions 

will apply. The Exchange proposes to 

apply existing index option margin 

requirements for the purchase and sale 

of options on the MSCI EM Index.22 In 

addition, the Exchange proposes to 

amend Rule 1079(d)(1) to also note that 

with respect to FLEX options on the 

MSCI EM index, the same number of 

contracts, 25,000, would apply with 

respect to the position limit. 


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23See Exchange Rule 1034 and proposed Rule 

1101A. 

24See Exchange Rule 1101A. 

25See Exchange Rule 1024. 

26See Exchange Rule 1026. 

27See Exchange Rule 1027. Further, this Rule 

states that discretionary accounts shall receive 

frequent review by a Registered Options Principal 

qualified person specifically delegated such 

responsibilities under Rule 1025, who is not 

exercising the discretionary authority. 

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

29 15 U.S.C. 78f(b)(5). 

30See generally Exchange Rules 1000A through 

1107A (Rules Applicable to Trading Options on 

Indices) and Exchange Rules 1000 through 1094 

(Rules Applicable to Trading of Options on Stocks, 

Exchange-Traded Fund Shares and Foreign 

Currencies). 

31See Exchange Rules 721 (Proper and Adequate 

Margin) and 1047A (Trading Rotations, Halts or 

Reopenings). 

32The exercise limits would also be 25,000 

contracts as per Exchange Rule 1002A. 

The Exchange proposes to set strike 

price intervals for these options at $2.50 

when the strike price of Full Value 

MSCI EM Index is below $200, and at 

least $5.00 strike price intervals 

otherwise. The minimum tick size for 

series trading below $3 would be $0.05 

and for series trading at or above $3 

would be $0.10.23

Pursuant to Exchange Rule 1101A, the 

Exchange proposes to open at least one 

expiration month and one series for 

each class of index options open for 

trading on the Exchange.24 The 

Exchange may open additional series of 

index options to maintain an orderly 

market, to meet customer demand or 

when the market price of the underlying 

index moves more than five strike prices 

from the initial exercise price or prices. 

New series of options may be added 

until the beginning of the month in 

which the options contract will expire. 

Additionally, due to unusual market 

conditions, the Exchange, in its 

discretion, may add a new series of 

options on the index until five (5) 

business days prior to expiration. Also, 

the opening of a new series of options 

shall not affect the series of options of 

the same class previously opened. 

Options on the MSCI EM Index would 

be subject to the same rules that 

presently govern all Exchange index 

options, including sales practice rules, 

margin requirements, trading rules, and 

position and exercise limits. Exchange 

Rules are designed to protect public 

customer trading. Specifically, Rule 

1024 prohibits members and member 

organizations from accepting a customer 

order to purchase or write an option 

unless such customer’s account has 

been approved in writing by a 

designated Options Principal of the 

Member.25 Additionally, Exchange Rule 

1026, regarding suitability, is designed 

to ensure that options are only sold to 

customers capable of evaluating and 

bearing the risks associated with trading 

in this instrument.26 Further, Exchange 

Rule 1027 permits members and 

employees of member organizations to 

exercise discretionary power with 

respect to trading options in a 

customer’s account only if the member 

or employee of a member organization 

has received prior written authorization 

from the customer and the account had 

been accepted in writing by a 

designated Options Principal.27 Finally, 

Exchange Rule 1025, Supervision of 

Accounts, Rule 1028, Confirmations, 

and Rule 1029, Delivery of Options 

Disclosure Documents, will also apply 

to trading in options on the MSCI EM 

Index. 

Surveillance and Capacity 

The Exchange represents that it has an 

adequate surveillance program in place 

for options on the MSCI EM Index and 

intends to apply those same procedures 

that it applies to the Exchange’s other 

index options. Additionally, the 

Exchange is a member of the 

Intermarket Surveillance Group (‘‘ISG’’) 

under the Intermarket Surveillance 

Group Agreement, dated June 20, 1994. 

The members of the ISG include all of 

the national securities exchanges. ISG 

members work together to coordinate 

surveillance and share information 

regarding the stock and options markets. 

In addition, the major futures exchanges 

are affiliated members of the ISG, which 

allows for the sharing of surveillance 

information for potential intermarket 

trading abuses. In addition, the 

Exchange is an affiliate member of the 

International Organization of Securities 

Commissions (‘‘IOSCO’’). IOSCO has 

members from over 100 different 

countries. Each of the countries from 

which there is a component security in 

the MSCI EM Index is a member of 

IOSCO. These members regulate more 

than 90 percent of the world’s securities 

markets. Additionally, the Exchange has 

entered into various Information 

Sharing Agreements and/or Memoranda 

of Understandings with various stock 

exchanges. Given the capitalization of 

this index and the deep and liquid 

markets for the securities underlying the 

MSCI EM Index, the concerns for market 

manipulation and/or disruption in the 

underlying markets are greatly reduced. 

There is also an active trading volume 

for the ETFS on the MSCI EM Index. 

The Exchange also represents that it 

has the necessary systems capacity to 

support the new options series that 

would result from the introduction of 

options on the Full Value MSCI EM 

Index, including LEAPS on the Full 

Value MSCI EM Index. 

Finally, the Exchange proposes to add 

a new Rule 1108A entitled ‘‘MSCI EM 

Index’’ to provide additional detailed 

information pertaining to the index as 

required by the licensor, including but 

not limited to, liability and other 

representations on the part of MSCI Inc. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act 28 in general, and furthers the 

objectives of Section 6(b)(5) of the Act 29

in particular, in that it will permit 

trading in options on Full Value MSCI 

EM Index pursuant to rules designed to 

prevent fraudulent and manipulative 

acts and practices to protect investor 

and the public interest, and to promote 

just and equitable principles of trade. 

The Exchange believes that because 

the MSCI EM Index currently contains 

more than 800 components and no 

single component comprises more than 

3% to 5% of the index, it is not easily 

subject to market manipulation. Given 

the capitalization of this index and the 

deep and liquid markets for the 

securities underlying the MSCI EM 

Index, the concerns for market 

manipulation and/or disruption in the 

underlying markets are greatly reduced. 

There is also an active trading volume 

for the ETF on the MSCI EM Index. 

Therefore, because the MSCI EM Index 

has a large number of component 

securities, representative of many 

countries, and trades a large volume 

with respect to ETFs today, the 

Exchange believes that the initial listing 

requirements are appropriate to trade 

options on this index. In addition, 

similar to other broad based indexes, the 

Exchange proposes various maintenance 

requirements, which require continual 

compliance and periodic compliance. 

Exchange Rules that apply to the 

trading of options on broad-based 

indexes also would apply to options on 

the Full Value MSCI EM Index.30 The 

trading of these options also would be 

subject to, among others, Exchange 

Rules governing margin requirements 

and trading halt procedures for index 

options.31 The Exchange would apply 

the same position limits as exist today 

for broad-based index options, namely 

25,000 contracts on the same side of the 

market for the MSCI EM Index option.32

All position limit hedge exemptions 

will apply. The Exchange proposes to 

apply existing index option margin 

requirements for the purchase and sale 


pmangrum on DSK3VPTVN1PROD with NOTICES
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33See Exchange Rule 721. 34 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

of options on the MSCI EM Index.33 In 

addition, the Exchange proposes to 

amend Rule 1079(d)(1) to also note that 

with respect to FLEX options on the 

MSCI EM index, the same number of 

contracts, 25,000, would apply with 

respect to the position limit. 

The Exchange represents that it has an 

adequate surveillance program in place 

for options on the MSCI EM Index. The 

Exchange also represents that it has the 

necessary systems capacity to support 

the new options series. As stated in the 

filing, the Exchange has rules in place 

designed to protect public customer 

trading. 

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 

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 email to rule-comments@

sec.gov. Please include File Number SR– 

Phlx–2011–179 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–2011–179. This file 

number should be included on the 

subject line if email 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 the 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 Number SR–Phlx– 

2011–179 and should be submitted on 

or before January 27, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.34

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2012–52 Filed 1–5–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66074; File No. SR–BX– 

2011–088] 

Self-Regulatory Organizations; 

NASDAQ OMX BX, Inc.; Notice of Filing 

and Immediate Effectiveness of 

Proposed Rule Change To Waive BX 

Port Pair Fees for Certain Newly-Added 

Routable Port Pairs 

December 30, 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 December 

28, 2011, NASDAQ OMX BX, Inc. 

(‘‘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 offer a 

waiver of BX Port Pair fees for certain 

newly-added routable port pairs during 

the months of January through March, 

2012. 

The text of the proposed rule change 

is below. Proposed new language is 

italicized; proposed deletions are in 

[brackets]. 

7015. Access Services 

The following charges are assessed by 

the Exchange for ports to establish 

connectivity to the NASDAQ OMX BX 

Equities Market, as well as ports to 

receive data from the NASDAQ OMX 

BX Equities Market: 

• $400 per month for each port pair, 

other than Multicast ITCH® data feed 

pairs, for which the fee is $1000 per 

month. The $400 port pair fee will be 

waived from January 2012 through 

March 2012 for a single port pair 

subscribed to by a member used for 

routing during this free period. To be 

eligible for the fee waiver, the member 

must increase the number of routable 

ports it has as of December 31, 2011 and 

must send routable order flow through 

the designated port pair at some point 

during the free period, otherwise the 

monthly fee will apply. 

• Internet Ports: An additional $200 

per month for each Internet port that 

requires additional bandwidth. 


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