Federal Register / Vol. 77, No. 55 / Wednesday, March 21, 2012 / Notices 16579 

68 15 U.S.C. 78f(b)(5). 69 15 U.S.C. 78s(b)(3)(A). 70 17 CFR 240.19b–4(f)(6). 

71 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3This proposal refers to ‘‘PHLX XL’’ as the 

Exchange’s automated options trading system. In 

May 2009 the Exchange enhanced the system and 

adopted corresponding rules referring to the system 

as ‘‘Phlx XL II.’’ See Securities Exchange Act 

Release No. 59995 (May 28, 2009), 74 FR 26750 

(June 3, 2009) (SR–Phlx–2009–32). The Exchange 

intends to submit a separate technical proposed 

rule change that would change all references to the 

system from ‘‘Phlx XL II’’ to ‘‘PHLX XL’’ for 

branding purposes. 

the Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 68 requirements that the rules of 

an exchange be designed to promote just 

and equitable principles of trade, to 

prevent fraudulent and manipulative 

acts, to remove impediments to and to 

perfect the mechanism for a free and 

open market and a national market 

system, and, in general, to protect 

investors and the public interest. 

In particular, the proposed rule 

change will prevent fraudulent and 

manipulative acts and protect investors 

and the public interest by continuing to 

prohibit Trading Permit Holders from 

engaging in deceptive and other abusive 

telemarketing acts or practices. 

Additionally, the proposed rule change 

removes impediments to and perfects 

the mechanism for a free and open 

market and a national market system, 

because it provides consistency among 

telemarketing rules of national 

securities exchanges and FINRA, 

therefore making it easier for investors 

to comply with these rules. The 

proposed rule change to include Rule 

9.24 in the list of Exchange Rules that 

apply to CBSX also protects investors by 

eliminating any potential confusion 

among investors as to whether Rule 9.24 

applies to CBSX Trading Permit 

Holders. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

CBOE 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 

The Exchange neither solicited nor 

received comments on the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not: 

A. Significantly affect the protection 

of investors or the public interest; 

B. Impose any significant burden on 

competition; and 

C. Become operative for 30 days from 

the date on which it was filed, or such 

shorter time as the Commission may 

designate, it has become effective 

pursuant to Section 19(b)(3)(A) 69 of the 

Act and Rule 19b–4(f)(6) 70 thereunder. 

At any time within 60 days of the 

filing of the 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 email to rulecomments@sec.gov. Please include File 

Number SR–CBOE–2012–024 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–CBOE–2012–024. 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 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 Number SR–CBOE– 

2012–024 and should be submitted on 

or before April 11, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.71

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–6765 Filed 3–20–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66602; File No. SR–Phlx– 

2012–31] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to the 

Acceptable Complex Execution 

(‘‘ACE’’) Parameter Order Protection 

Feature 

March 14, 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 March 8, 

2012, 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 the Substance 

of the Proposed Rule Change 

The Exchange proposes to amend 

Exchange Rule 1080, Commentary .08, 

Complex Orders on Phlx XL, by 

adopting new Rule 1080.08(i), which 

would establish an Acceptable Complex 

Execution Parameter (‘‘ACE 

Parameter’’), a price range outside of 

which a Complex Order (as defined 

below) will not be executed by the 

PHLX XL® automated options trading 

system 3 following a Complex Order 


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16580 Federal Register / Vol. 77, No. 55 / Wednesday, March 21, 2012 / Notices 

4For purposes of the electronic trading of 

Complex Orders on the Exchange, a Complex Order 

is an order involving the simultaneous purchase 

and/or sale of two or more different options series 

in the same underlying security, priced as a net 

debit or credit based on the relative prices of the 

individual components, for the same account, for 

the purpose of executing a particular investment 

strategy. 

A Complex Order can also be a stock-option 

order, which is an order to buy or sell a stated 

number of units of an underlying security (stock or 

Exchange Traded Fund Share (‘‘ETF’’)) coupled 

with the purchase or sale of options contract(s). The 

underlying security must be the deliverable for the 

options component of that Complex Order and 

represent exactly 100 shares per option for regular 

way delivery. Stock-option orders can only be 

executed against other stock-option orders and 

cannot be executed by the System against orders for 

the individual components. Member organizations 

may only submit Complex Orders with a stock/ETF 

component if such orders comply with the 

Qualified Contingent Trade Exemption from Rule 

611(a) of Regulation NMS. Member organizations 

submitting such Complex Orders with a stock/ETF 

component represent that such orders comply with 

the Qualified Contingent Trade Exemption. 

Members of FINRA or the NASDAQ Stock Market 

LLC (‘‘NASDAQ’’) are required to have a Uniform 

Service Bureau/Executing Broker Agreement 

(‘‘AGU’’) with Nasdaq Options Services LLC in 

order to trade Complex Orders containing a stock/ 

ETF component; firms that are not members of 

FINRA or NASDAQ are required to have a Qualified 

Special Representative (‘‘QSR’’) arrangement with 

NOS in order to trade Complex Orders containing 

a stock/ETF component. The maximum number of 

components of a Complex Order is six. A stockoption order may include up to five options 

components (legs). See Exchange Rule 1080.08(a)(i). 

5COLA is the automated Complex Order Live 

Auction process. See Exchange Rule 1080.08(e). 

6See Exchange Rule 1080.08(a)(vi). 

7See Exchange Rule 1080.08(f). 

8For simplicity of explanation, the above 

example uses a 10% ACE Parameter, which is 

consistent with the 3% minimum in the proposed 

rule. 

9The Exchange notes that the Chicago Board 

Options Exchange, Incorporated (‘‘CBOE’’) 

currently applies a no less than 3 percent 

‘‘acceptable percentage distance’’ outside of which 

it will not execute complex orders. See Securities 

Exchange Act Release No. 66207 (January 20, 2012), 

77 FR 4073 (January 26, 2012) (SR–CBOE–2012– 

004) (Notice of Filing and Immediate Effectiveness 

of Proposed Rule Change Related to Automatic 

Execution and Complex Order Price Check 

Parameter Features) (‘‘CBOE Notice’’). 

10 15 U.S.C. 78f. 

11 15 U.S.C. 78f(b)(5). 

Live Auction (‘‘COLA’’), as defined 

below. 

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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of the proposed rule 

change is to establish the ACE 

Parameter in order to prevent Complex 

Orders 4 from automatically executing at 

potentially erroneous prices. The ACE 

Parameter feature is designed to help 

maintain a fair and orderly market. The 

Exchange believes that the ACE 

Parameter feature will assist with the 

maintenance of fair and orderly markets 

by helping to mitigate the potential risk 

of executions at prices which are 

extreme and potentially erroneous. 

The ACE Parameter feature is used to 

define a price range outside of which a 

Complex Order will not be executed 

following a COLA.5 The ACE Parameter 

is a percentage defined by the Exchange 

on an issue-by-issue basis. The ACE 

Parameter percentage shall not be less 

than 3 percent. The ACE Parameter 

price range is based on the Complex 

National Best Bid or Offer (‘‘cNBBO’’) 6

at the time an order would be executed. 

A Complex Order to sell will not be 

executed at a price that is lower than the 

cNBBO bid by more than the ACE 

Parameter percentage. A Complex Order 

to buy will not be executed at a price 

that is higher than the cNBBO offer by 

more than the ACE Parameter 

percentage. A Complex Order or a 

portion of a Complex Order that cannot 

be executed within the ACE Parameter 

pursuant to the proposed rule will be 

placed on [sic] Exchange’s Complex 

Limit Order Book (‘‘CBOOK’’).7

For example, assume the ACE 

parameter is set at 10%, and a PHLX XL 

participant submits a Complex Order 

with a strategy to buy Series A and buy 

Series B. 

A complex order is received to buy 30 

Series A and buy 30 Series B (30 units 

of the strategy) for a net debit of $8.40 

and a COLA is initiated. At the end of 

the COLA, the market is: 

NBBO for Series A is $4.50–$4.60, size 

10 × 10. 

NBBO for Series B is $2.90–$3.00, size 

10 × 10. 

cNBBO for the strategy is $7.40–$7.60. 

Executions to buy the strategy (buy Series 

A and buy Series B) will occur up to $8.36 

($7.60 + [0.10 × $7.60]). Any remainder of the 

order will be placed on the CBOOK at $8.40. 

The Exchange believes a minimum 3 

percent level 8 is reasonable and 

appropriate because a marketable order 

that would deviate from the cNBBO by 

3% or more may be indicative of an 

extreme or potentially erroneous price, 

and an Exchange participant would 

likely want to evaluate the affected 

Complex Order further following the 

COLA before receiving an automatic 

execution. The Exchange also believes 

that a 3 percent minimum is reasonable 

and appropriate in comparison to other 

price check parameters currently in 

existence on at least one other U.S. 

options exchange.9

The Exchange will issue an Options 

Trader Alert (‘‘OTA’’) to membership 

indicating the issue-by-issue ACE 

Parameter percentages. The Exchange 

will also maintain a list of ACE 

Parameter percentages on its Web site. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the provisions of Section 6 of the Act,10

in general and with Section 6(b)(5) of 

the Act,11 in that it is designed 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; and is not designed to 

permit unfair discrimination between 

customers, issuers, brokers, or dealers, 

or to regulate by virtue of any authority 

conferred by the Act matters not related 

to the purposes of the Act or the 

administration of the Exchange. 

The ACE Parameter feature is 

designed to protect investors from 

extreme and potentially erroneous 

executions of their Complex Orders. The 

Exchange also believes the ACE 

Parameter feature should assist with the 

maintenance of fair and orderly markets 

by helping to mitigate the potential risks 

of receiving executions at prices that are 

extreme and potentially erroneous. 

Finally, the proposed rule change 

should also make it easier for users to 

read and understand the operation of 

PHLX XL as it relates to the execution 

of Complex Orders, and will fully 

describe the operation of the new ACE 

Parameter feature, all to the benefit of 


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Federal Register / Vol. 77, No. 55 / Wednesday, March 21, 2012 / Notices 16581 

12 15 U.S.C. 78s(b)(3)(A). 

13 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 satisfied this 

requirement. 

14 17 CFR 240.19b–4(f)(6)(iii). 

15The Commission notes that the ACE Parameter 

is substantially similar to a price check parameter 

adopted by another options exchange. See CBOE 

Rule 6.53C, Interpretation and Policy .08(e) and 

CBOE Notice, supra note 9. 

16For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule change’s impact on efficiency, 

competition, and capital formation. 15 U.S.C. 78c(f). 17 17 CFR 200.30–3(a)(12). 

PHLX XL participants, and to the 

options markets as a whole. 

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 

Because the foregoing 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 for 30 days after the date of 

the filing, or such shorter time as the 

Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 12 and Rule 19b– 

4(f)(6) 13 thereunder. 

Phlx has asked the Commission to 

accelerate the 30-day operative delay.14

The Commission finds that accelerating 

the 30-day operative delay is consistent 

with the protection of investors and the 

public interest because the ACE 

Parameter is designed to prevent the 

automatic execution of Complex Orders 

at potentially extreme or erroneous 

prices.15 Accordingly, the Commission 

designates the proposal operative upon 

filing.16

At any time within 60 days of the 

filing of the 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. If the 

Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or 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 rulecomments@sec.gov. Please include File 

Number SR–Phlx–2012–31 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–2012–31. 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 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 

publicly available. All submissions 

should refer to File Number SR–Phlx– 

2012–31, and should be submitted on or 

before April 11, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–6764 Filed 3–20–12; 8:45 am] 

BILLING CODE 8011–01–P 

DEPARTMENT OF TRANSPORTATION 

Maritime Administration 

Reports, Forms and Recordkeeping 

Requirements; Agency Information 

Collection Activity Under OMB Review 

AGENCY: Maritime Administration, DOT. 

ACTION: Notice and request for 

comments. 

SUMMARY: In compliance with the 

Paperwork Reduction Act of 1995 (44 

U.S.C. 3501 et seq.), this notice 

announces that the Information 

Collection abstracted below has been 

forwarded to the Office of Management 

and Budget (OMB) for review and 

approval. The nature of the information 

collection is described as well as its 

expected burden. The Federal Register 

Notice with a 60-day comment period 

soliciting comments on the following 

collection of information was published 

on January 3, 2012, and comments were 

due by March 5, 2012. No comments 

were received. 

DATES: Comments must be submitted on 

or before April 20, 2012. 

FOR FURTHER INFORMATION CONTACT: 

Cmdr Michael DeRosa, Maritime 

Administration, U.S. Merchant Marine 

Academy, 300 Steamboat Road, New 

York, NY 11024. Telephone: 516–726– 

5642; or email: 

DeRosaM@USMMA.EDU. Copies of this 

collection also can be obtained from that 

office. 

SUPPLEMENTARY INFORMATION: Maritime 

Administration (MARAD). 

Title: U.S. Merchant Marine Academy 

Candidate Application for Admission. 

OMB Control Number: 2133–0010. 

Type of Request: Extension of 

currently approved collection. 

Affected Public: Individuals desiring 

to become students at the U.S. Merchant 

Marine Academy. 

Forms: KP 2–65. 

Abstract: The collection consists of 

Parts I, II, and III of Form KP 2–65 (U.S. 

Merchant Marine Academy Candidate 

Application). Part I of the form is 

completed by individuals wishing to be 

admitted as students to the U.S. 

Merchant Marine Academy. 

Annual Estimated Burden Hours: 

12,500 hours. 


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