16106 Federal Register / Vol. 77, No. 53 / Monday, March 19, 2012 / Notices 

5 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

clearinghouse and clearing members 

and improve margin efficiency (as 

margin requirements will no longer 

need to take into account the additional 

risk from a T+3 as opposed to a T+1 

settlement rule). ICE Clear Europe’s CDS 

Risk Committee approved the proposed 

rule changes. 

The other proposed changes in the 

ICE Clear Europe Rules reflect updates 

to cross-references and defined terms 

and similar drafting clarifications, and 

do not affect the substance of the ICE 

Clear Europe Rules or cleared products. 

(B) Self-Regulatory Organization’s 

Statement on Burden on Competition 

ICE Clear Europe does not believe the 

proposed rule and procedural changes 

would have any impact, or impose any 

burden, on competition. 

(C) Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

Written comments relating to the 

proposed rule change have not been 

solicited or received. ICE Clear Europe 

will notify the Commission of any 

written comments received by ICE Clear 

Europe. 

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 

up to 90 days (i) as the Commission may 

designate 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 the 

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 rulecomments@sec.gov. Please include File 

Number SR–ICEEU–2012–04 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–ICEEU–2012–04. 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 Section, 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 filings 

will also be available for inspection and 

copying at the principal office of ICE 

Clear Europe and on ICE Clear Europe’s 

Web site at https://www.theice.com/ 

publicdocs/regulatory_filings/ 

ICE_Clear_Europe_T+1_Settlement.pdf. 

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–ICEEU–2012–04 and 

should be submitted on or before April 

9, 2012. 

For the Commission by the Division of 

Trading and Markets, pursuant to delegated 

authority.5

Kevin O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–6496 Filed 3–16–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66582; File No. SR–ISE– 

2012–16] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing of Proposed Rule 

Change To Amend ISE Rule 722 

(Complex Orders) To Provide Its 

Members With a Choice in Executing 

Broker-Dealers for the Stock Leg(s) of 

Stock-Option Orders 

March 13, 2012. 

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

Securities Exchange Act of 1934 (the 

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

notice is hereby given that on February 

29, 2012, the International Securities 

Exchange, LLC (the ‘‘Exchange’’ or the 

‘‘ISE’’) 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 selfregulatory 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 the Substance 

of the Proposed Rule Change 

The Exchange proposes to amend 

Rule 722 (Complex Orders) to allow 

Members to execute the stock legs of 

stock-option orders through a brokerdealer of their choosing. 

The text of the proposed rule change 

is available on the Exchange’s Internet 

Web site at http://www.ise.com, 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 the 

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. 


emcdonald on DSK29S0YB1PROD with NOTICES
Federal Register / Vol. 77, No. 53 / Monday, March 19, 2012 / Notices 16107 

3 In many cases, stock-option orders that are 

matched on the ISE have two different Members on 

the trade. The Exchange is not able to execute the 

stock legs of such a transaction unless both 

Members have an agreement with the broker-dealer 

to which the stock legs are routed. 

4 15 U.S.C. 78f. 

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

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

Purpose—Under the ISE’s current 

procedure for executing stock-options 

orders, ISE Members may elect to have 

the ISE electronically communicate the 

stock leg(s) of a stock-option order to a 

designated broker-dealer for execution. 

To participate in the automated process, 

the ISE Member must have entered into 

a customer agreement with the 

designated broker-dealer. The ISE 

Member is responsible for fees and other 

charges the designated broker-dealer 

imposes from executing the trades, and 

the ISE receives no fees related to the 

stock portion of the stock-option trade. 

The Exchange is now proposing to 

amend its Rule 722 to expand the 

service offered to ISE Members by 

accommodating multiple potential 

execution brokers. Under the proposal, 

the Exchange will connect to multiple 

broker-dealers for the execution of the 

stock component of stock-option orders. 

The Exchange will route orders to the 

broker-dealers using routing logic that 

takes into consideration objective 

factors, such as execution cost, speed of 

execution and fill rates, and ISE 

Members will have the ability to 

indicate preferred execution venues. 

The Exchange will have no financial 

arrangements with the executing brokerdealers with respect to routing the stock 

leg(s) of stock-option orders. 

As is currently required, after the 

stock leg(s) of the orders are routed to 

a broker-dealer for execution, that 

broker-dealer will be responsible for 

determining whether the order may be 

executed in accordance with the 

applicable rules, such as the Regulation 

NMS trade-through rules. As with the 

current procedure, the stock-option 

order will not be executed on the ISE if 

the broker-dealer cannot execute the 

equity orders at the designated price. 

ISE Members will continue to be 

required to enter into an agreement with 

the broker-dealer(s) to which their 

orders can be routed, and the 

Exchange’s routing logic will only route 

orders to the broker-dealers with whom 

they have agreements. In this respect, 

ISE Members will continue to be 

required to enter into an agreement with 

the designated broker-dealer that the 

Exchange currently routes the stockleg(s) to so that a [sic] there is at least 

one common available broker-dealer 

through which the matched stock-leg(s) 

may be executed.3

The Exchange also proposes to 

remove from its rules provisions related 

to the non-automatic execution of stockoption orders. Members have found the 

automatic execution of stock-option 

orders to be preferable and no longer 

enter stock-option orders for nonautomatic execution. 

Basis—The Exchange 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. 

Specifically, providing the ISE Members 

with multiple broker-dealers through 

which they may choose to have the 

stock leg(s) of their stock-option order 

routed will enable Members to avail 

themselves of pricing discounts. The 

Exchange believes that this will 

encourage members to route stockoption orders to the ISE, thus increasing 

the liquidity for stock-option orders 

executed on the ISE. Additionally, the 

Exchange believes it is fair and 

reasonable and not discriminatory to 

remove from the rules the ability for 

Members to execute stock-option orders 

in a non-automated manner, as there is 

no demand from Members for this 

execution alternative. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The proposed rule change does not 

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 has not solicited, and 

does not intend to solicit, comments on 

this proposed rule change. The 

Exchange has not received any 

unsolicited written comments from 

members or other interested parties. 

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– 

ISE–2012–16 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–ISE–2012–16. 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 


emcdonald on DSK29S0YB1PROD with NOTICES
16108 Federal Register / Vol. 77, No. 53 / Monday, March 19, 2012 / Notices 

6 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3For a complete description of PIXL, see 

Securities Exchange Act Release No. 63027 (October 

1, 2010), 75 FR 62160 (October 7, 2010) (SR–Phlx– 

2010–108). 

4See Securities Exchange Act Release No. 62678 

(August 10, 2010), 75 FR 50021 (August 16, 2010) 

(SR–Phlx–2010–108) (Notice of Filing of Proposed 

Rule Change by NASDAQ OMX PHLX, Inc. Relating 

to a Proposed Price Improvement System, Price 

Improvement XL (PIXLSM)). 

5 Id. at p. 50021. 

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–ISE– 

2012–16 and should be submitted on or 

before April 9, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.6

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–6497 Filed 3–16–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66583; File No. SR–Phlx– 

2012–32] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to 

Price Improvement XL (‘‘PIXLSM’’) 

March 13, 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 9, 

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, 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 the Substance 

of the Proposed Rule Change 

The Exchange proposes to amend 

Rule 1080(n), Price Improvement XL 

(‘‘PIXLSM’’), to correct Rule 

1080(n)(i)(A)(2) pertaining to PIXL 

Orders (described below) for the 

account of a public customer with a size 

of less than 50 contracts. The amended 

rule would reflect the correct price at 

which an Initiating Member (described 

below) must guarantee the execution of 

a PIXL Order (described below) that the 

Initiating Member submits into a PIXL 

Auction (described 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 the 

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 correct Exchange Rule 

1080(n), which governs the Exchange’s 

price improvement auction mechanism, 

PIXL.3 In the PIXL mechanism, a 

member (an ‘‘Initiating Member’’) must 

guarantee the execution of (i.e., ‘‘stop’’) 

an order it represents as agent (‘‘PIXL 

Order’’) against principal interest or 

against any other order it represents as 

agent (an ‘‘Initiating Order’’) in the PIXL 

Auction (‘‘Auction’’), in which other 

participants may compete with the 

Initiating Member’s order to execute 

against the PIXL Order. The correction 

concerns rule text respecting public 

customer PIXL Orders for less than 50 

contracts that are entered into the 

Auction. 

Exchange Rule 1080(n)(i) describes 

the circumstances under which an 

Initiating Member may initiate an 

Auction. Rule 1080(n)(i)(A)(1) states 

that if the PIXL Order is for the account 

of a public customer and is for a size of 

50 contracts or more, the Initiating 

Member must stop the entire PIXL 

Order at a price that is equal to or better 

than the National Best Bid/Offer 

(‘‘NBBO’’) on the opposite side of the 

market from the PIXL Order, provided 

that such price must be at least one 

minimum price improvement increment 

(as determined by the Exchange but not 

smaller than one cent) better than any 

limit order on the limit order book on 

the same side of the market as the PIXL 

Order. The purpose of this provision is 

to ensure that public customer PIXL 

Orders for 50 contracts or more are 

guaranteed at least the NBBO but do not 

trade ahead of other limit orders already 

on the Exchange’s limit order book at 

the existing limit price. 

Currently, Exchange Rule 

1080(n)(i)(A)(2) states that if the PIXL 

Order is for the account of a public 

customer and is for a size of less than 

50 contracts, the Initiating Member must 

stop the entire PIXL Order at a price that 

is the better of: (i) the PHLX Best Bid/ 

Offer (‘‘PBBO’’) price on the opposite 

side of the market from the PIXL Order 

improved by at least one minimum 

price improvement increment, or (ii) the 

PIXL Order’s limit price (if the order is 

a limit order), provided in either case 

that such price is better than the NBBO 

(emphasis added), and at least one 

minimum price improvement increment 

better than any limit order on the book 

on the same side of the market as the 

PIXL Order. 

In its filing to adopt the rules 

governing PIXL, and in the Notice of 

Filing of Proposed Rule Change 

published in the Federal Register,4 the 

Exchange described its intent 

concerning the price at which an 

Initiating Member must stop a PIXL 

Order for the account of a public 

customer for a size of less than 50 

contracts: 

‘‘[i]f the PIXL Order is for the account of 

a public customer and is for a size of less 

than 50 contracts, the Initiating Member must 

stop the entire PIXL Order at a price that is 

the better of: (i) The PBBO price on the 

opposite side of the market from the PIXL 

Order improved by at least one minimum 

price improvement increment, or (ii) the 

PIXL Order’s limit price (if the order is a 

limit order), provided in either case that such 

price is at or better than the NBBO.’’ 

(emphasis added).5

Despite this representation in the 

Notice of Filing, current Rule 

1080(n)(i)(A)(2) states, in relevant part, 

‘‘[p]rovided in either case that such 

price is better than the NBBO’’ 

(emphasis added). By way of the 

omission of the words ‘‘at or’’ from Rule 

1080(n)(i)(A)(2), the current rule does 

not accurately describe the operation of 

PIXL, and does not reflect Exchange’s 

intent to permit Initiating Members to 


emcdonald on DSK29S0YB1PROD with NOTICES