Federal Register / Vol. 77, No. 45 / Wednesday, March 7, 2012 / Notices 13675 

44 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Securities Exchange Act Release No. 66177 

(January 18, 2012), 77 FR 3527 (‘‘Notice’’). 

4See CHX Rules, Article 17, Rule 1, Interpretation 

and Policy .02. 

5See Securities Exchange Act Release No. 54550 

(September 29, 2006), 71 FR 59563 (October 10, 

2006) (SR–CHX–2006–05). 

6See id. 

7See Securities Exchange Act Release No. 65633 

(October 26, 2011), 76 FR 67509 (November 1, 2011) 

(SR–CHX–2011–29). 

8See Notice, 77 FR at 3529. 

9See id. 

10See Article 1, new Rule 1(gg) (defining IBR). 

See also amended Interpretation and Policy .02 to 

Article 17, Rule 1 (redefining IBR as an individual 

person affiliated with an Institutional Broker who 

is authorized to accept orders, enter bids and offers 

and execute transactions on behalf of an 

Institutional Broker and who has registered with the 

Exchange as an IBR as provided in Article 6). 

11See Article 17, revised Rule 2 (clarifying that 

only Participants Firms are eligible to register as 

Institutional Brokers). 

12See Article 17, Rule 3(e) (the obligations owed 

by Institutional Brokers under Article 11 include 

the affirmative obligation to provide electronic 

information to the Exchange in certain 

circumstances); Interpretation and Policy .01(a) to 

Article 6, Rule 3 (all applicants seeking to register 

as IBRs must successfully complete an Institutional 

Broker exam). 

13See amended Article 17, Rule 3 (enumerated 

Institutional Broker responsibilities apply to 

activities by or through an affiliated IRR); amended 

Article 17, Rule 5(a) (the ability to make clearing 

submissions is limited to IBRs); new Article 17, 

Rule 6 (creating a duty of Institutional Brokers with 

a non-Institutional Broker unit to establish and 

maintain information barriers between the 

Institutional Broker unit and non-Institutional 

Broker unit); amended Article 17, Rule 1 (only 

registered IBRs are permitted to use Exchange 

systems provided for Institutional Brokers for 

handling orders and reporting transactions, i.e., 

Brokerplex®). For a description of Brokerplex®, see 

Notice, 77 FR at 3528, n.9. 

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– 

2012–23 and should be submitted on or 

before March 28, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.44

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–5555 Filed 3–6–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66503; File No. SR–CHX– 

2012–02] 

Self-Regulatory Organizations; 

Chicago Stock Exchange, Inc.; Order 

Approving a Proposed Rule Change To 

Add to and Amend Its Rules Regarding 

the Obligations of Institutional Brokers 

Registered With the Exchange 

March 1, 2012. 

I. Introduction 

On January 6, 2012, the Chicago Stock 

Exchange, Inc. (‘‘CHX’’ or the 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’) 1 and Rule 19b–4 

thereunder,2 a proposed rule change to 

permit broker-dealers registered as 

Institutional Brokers with CHX to 

operate a non-Institutional Broker unit 

within the same Participant Firm. The 

proposed rule change was published for 

comment in the Federal Register on 

January 24, 2012.3 The Commission 

received no comment letters on the 

proposal. This order approves the 

proposed rule change. 

II. Description of the Proposal 

Institutional Brokers are an elective 

sub-category of Exchange Participants 

who are subject to the obligations of 

Article 17 of the CHX rules. Registration 

as an Institutional Broker is limited to 

Participant Firms, and is not available to 

individual persons.4 Under current CHX 

rules, each individual person authorized 

to enter bids and offers and execute 

transactions on behalf of an Institutional 

Broker is considered an Institutional 

Broker Representative (‘‘IBR’’) and must 

be registered with the Exchange as 

provided in Article 6. 

Institutional Brokers are the 

successors to the floor brokers that 

operated within the Exchange’s 

previous floor-based, auction trading 

model. The Exchange replaced its floorbased, auction trading model with its 

New Trading Model, which features an 

electronic limit order matching system 

as its core trading facility (‘‘Matching 

System’’), beginning in late 2006.5

Under CHX’s New Trading Model, 

Institutional Brokers were regarded as 

operating on the Exchange.6 Recently, 

the Exchange amended its rules to 

provide that Institutional Brokers are no 

longer considered to be operating on the 

Exchange.7 Given this change in the 

status of Institutional Brokers, the 

Exchange stated that the instant 

proposal is designed to enable 

Institutional Brokers to engage in 

business activities beyond those 

handled by IBRs, such as over-thecounter (‘‘OTC’’) market making, while 

ensuring that their activities as an 

Institutional Broker are appropriately 

governed by CHX rules. 

The Exchange proposed to permit 

Institutional Brokers to operate a nonInstitutional Broker unit within the 

same Participant Firm. A firm registered 

with the Exchange as Institutional 

Broker could maintain other lines of 

business separate and distinct from its 

Institutional Broker activities without 

subjecting those other areas to the 

requirements of Article 17, Rule 3 

contingent upon the creation and 

maintenance of effective information 

barrier procedures as specified in 

proposed Rule 6 of Article 17. The 

Exchange stated that non-IBR activities 

of a Participant Firm registered as an 

Institutional Broker would remain 

subject to all other applicable provisions 

of the Exchange’s rules.8 The non-IBR 

personnel at an Institutional Broker 

could continue to send orders to the 

Exchange, but those orders would be 

regarded as standard order-sending 

Participant orders, not as Institutional 

Broker activity. The Exchange stated 

that it can and will distinguish between 

orders sent to the Matching System by 

IBRs and other orders sent by 

Institutional Brokers to the Matching 

System for billing and other purposes.9

CHX proposed to modify its rules 

correspondingly to redefine IBR10 and 

‘‘Participant Firm,’’ 11 and amend the 

obligations of Institutional Brokers and 

IBRs.12 Certain Institutional Broker 

privileges and responsibilities would 

apply only to the activities of those 

individuals registered with the 

Exchange as IBRs (and clerks thereto).13

Further, the Exchange proposed to 


srobinson on DSK4SPTVN1PROD with NOTICES
13676 Federal Register / Vol. 77, No. 45 / Wednesday, March 7, 2012 / Notices 

14 In approving this proposed rule change, the 

Commission has considered the proposed rule’s 

impact on efficiency, competition, and capital 

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

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

16See supra note 7. 

17See id. 

18 15 U.S.C. 78s(b)(2). 

19 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(6). 

5See Securities Exchange Act Release No. 49066 

(January 13, 2004), 69 FR 2773 (January 20, 2004) 

(establishing a fee schedule for the proposed BOX 

facility); Securities Exchange Act Release No. 49065 

(January 13, 2004), 69 FR 2768 (January 20, 2004) 

(creating Boston Options Exchange Regulation LLC 

to which the Exchange would delegate its selfregulatory functions with respect to the BOX 

facility); Securities Exchange Act Release No. 49068 

(January 13, 2004), 69 FR 2775 (January 20, 2004) 

(approving trading rules for the BOX facility); 

Securities Exchange Act Release No. 49067 (January 

13, 2004), 69 FR 2761 (January 20, 2004) (approving 

certain regulatory provisions of the operating 

agreement of BOX LLC). 

correct typographical mistakes and to 

make clarifying changes. 

III. Discussion 

The Commission finds that the 

proposed rule change is consistent with 

the requirements of the Act and the 

rules and regulations thereunder 

applicable to a national securities 

exchange.14 Specifically, the 

Commission finds that the proposal is 

consistent with Section 6(b)(5) of the 

Act,15 in that it is designed to promote 

just and equitable principles of trade, to 

foster cooperation and coordination 

with persons engaged in facilitating 

transaction in securities, to remove 

impediments and perfect the 

mechanisms of a free and open market, 

and, in general, to protect investors and 

the public interest. 

As noted above, the Exchange 

recently amended its rules to provide 

that Institutional Brokers are no longer 

deemed to be operating on the 

Exchange.16 Accordingly, Institutional 

Brokers are now permitted to handle 

and execute orders otherwise than on 

the Exchange.17 Given this change, the 

Commission believes that it is 

appropriate and consistent with the Act 

for the Exchange to alter the privileges 

and responsibilities of Institutional 

Brokers to apply only to the activities of 

IBRs (and their clerks). The proposed 

changes would allow Institutional 

Brokers to carry out business strategies 

similar to those of other participants on 

the Exchange, while still ensuring that 

persons acting as IBRs are subject to the 

appropriate regulatory obligations. 

Further, the proposed rules regarding 

information barrier procedures should 

help ensure that there are adequate 

safeguards to prevent IBR units and 

non-IBR units from sharing non-public 

market information. As it gains 

experience overseeing the new multiunit Institutional Brokers, the 

Commission expects the Exchange to 

assess whether any other informational 

barriers are necessary to prevent the 

flow of market information between IBR 

units and non-IBR units. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,18 that the 

proposed rule change (SR–CHX–2012– 

02) be, and it hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–5474 Filed 3–6–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66501; File No. SR–BX– 

2012–014] 

Self-Regulatory Organizations; 

NASDAQ OMX BX, Inc.; Notice of Filing 

and Immediate Effectiveness of 

Proposed Rule To Amend the BOX LLC 

Agreement 

March 1, 2012. 

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 February 

22, 2012, NASDAQ OMX BX, Inc. (the 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the self-regulatory organization. The 

Exchange filed the proposed rule change 

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

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

which renders the proposal effective 

upon filing with the Commission. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of the Substance 

of the Proposed Rule Change 

The Exchange proposes to amend the 

Sixth Amended and Restated Operating 

Agreement (‘‘BOX LLC Agreement’’) of 

the Boston Options Exchange Group 

LLC (‘‘BOX LLC’’), in connection with 

the proposed acquisition of TMX Group 

Inc., a company incorporated in 

Ontario, Canada (‘‘TMX Group’’) by 

Maple Group Acquisition Corporation, a 

company incorporated in Ontario, 

Canada (‘‘Maple’’). The text of the 

proposed rule change is available from 

the principal office of the Exchange, at 

the Commission’s Public Reference 

Room and also on the Exchange’s 

Internet Web site at http:// 

nasdaqomxbx.cchwallstreet.com/ 

NASDAQOMXBX/Filings/. 

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 these statements may be examined at 

the places specified in Item IV below. 

The self-regulatory organization 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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

On January 13, 2004, the Commission 

approved four Exchange proposals that 

together established, through an 

operating agreement among its owners, 

BOX LLC, a Delaware limited liability 

company, to operate BOX as an options 

trading facility of the Exchange.5

Currently, the Montreal Exchange 

Inc., a company incorporated in Quebec, 

Canada (‘‘MX’’), is a direct subsidiary of 

TMX Group. MX US 2, Inc., a Delaware 

corporation and indirect, wholly owned 

subsidiary of MX (‘‘MX US’’), holds a 

53.83% ownership interest in BOX LLC. 

The Exchange is submitting the 

proposed rule change to the 

Commission to amend the BOX LLC 

Agreement pursuant to the proposed 

Instrument of Accession in connection 

with the Acquisition (as defined below). 

Maple’s investors comprise Alberta 

Investment Management Corporation, 

Caisse de de ́poˆt et placement du 

Que ́bec, Canada Pension Plan 

Investment Board, CIBC World Markets 

Inc., Desjardins Financial Corporation, 

Dundee Capital Markets Inc., Fonds de 

solidarite ́ des travailleurs du Que ́bec 

(F.T.Q.), GMP Capital Inc., The 

Manufacturers Life Insurance Company, 

National Bank Financial & Co. Inc., 

Ontario Teachers’ Pension Plan Board, 

Scotia Capital Inc. and TD Securities 


srobinson on DSK4SPTVN1PROD with NOTICES