Federal Register / Vol. 77, No. 66 / Thursday, April 5, 2012 / Notices 20657 

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

2 17 CFR 240.19b–4. 

3 17 CFR 240.19b–4(f)(6). 

4PSX is the Exchange’s cash equities market 

electronic trading platform. 

encourages increased mail volume 

(factor 7) and, by charging for an 

attractive new option that does not 

increase the Postal Service costs 

significantly, will help First-Class and 

Standard Mail cover attributable costs 

(factor 2). Id. 

Workshare discounts. According to 

the Postal Service, the Adjustment will 

not impact current workshare discounts. 

Id. at 8. 

Preferred rates. The same prices for 

Picture Permit Imprints will apply to 

Nonprofit pieces entered as Standard 

Mail High Density and Saturation 

Letters, Carrier Route, and Letters. Id. 

Based on the limited volumes expected 

to use this price category, the Postal 

Service expects that the ratio between 

nonprofit and commercial prices will 

remain close to 60 percent, thus meeting 

the statutory requirement in 39 U.S.C. 

3626(a)(6). 

Mail Classification Schedule (MCS). 

The Postal Service provides proposed 

MCS language in Appendix A of its 

Notice. 

III. Commission Action 

The Commission establishes Docket 

No. R2012–7 to consider all matters 

related to the Notice. The Commission’s 

rules provide for a 20-day comment 

period starting from the date of the 

filing of the Notice. See 39 CFR 

3010.13(a)(5). Interested persons may 

express views and offer comments on 

whether the planned changes are 

consistent with the policies of 39 U.S.C. 

3622 and 39 CFR part 3010. Comments 

are due no later than April 17, 2012. 

The Commission appoints Katalin K. 

Clendenin to represent the interests of 

the general public in this proceeding. 

IV. Ordering Paragraphs 

It is ordered: 

1. The Commission establishes Docket 

No. R2012–7 to consider matters raised 

by the Postal Service’s March 28, 2012 

Notice. 

2. Interested persons may submit 

comments on the planned price category 

implementation. Comments are due no 

later than April 17, 2012. 

3. Pursuant to 39 U.S.C. 505, Katalin 

K. Clendenin is appointed to serve as an 

officer of the Commission (Public 

Representative) to represent the 

interests of the general public in this 

proceeding. 

4. The Secretary shall arrange for 

publication of this notice in the Federal 

Register. 

By the Commission. 

Shoshana M. Grove, 

Secretary. 

[FR Doc. 2012–8161 Filed 4–4–12; 8:45 am] 

BILLING CODE 7710–FW–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66697; File No. SR–Phlx– 

2012–39] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Related to NonDisplay of Primary Pegged Orders With 

an Offset Amount 

March 30, 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 March 23, 

2012, NASDAQ OMX PHLX LLC 

(‘‘Phlx’’ or ‘‘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 

Exchange has designated the proposed 

rule change as constituting a rule 

change under Rule 19b–4(f)(6) under the 

Act,3 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 Substance of 

the Proposed Rule Change 

The Exchange proposes to provide 

amend Exchange Rule 3301(f)(4) to 

provide for non-display of Primary 

Pegged Orders with an offset amount. 

The text of the proposed rule change is 

available at: http:// 

www.nasdaqtrader.com/ 

micro.aspx?id=PHLXRulefilings, at the 

Exchange’s principal office, 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 those 

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 parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Phlx proposes to amend Rule 

3301(f)(4) to provide that Primary 

Pegged Orders with an offset amount 

will be non-displayed, a change that 

will improve system and inter-market 

price stability. Pegged Orders are orders 

that, once entered, adjust in price 

automatically, in response to changes in 

the inside bids or offers of NASDAQ 

OMX PSX (‘‘PSX’’) 4 or the national 

market system, depending upon the 

type of Pegged Order. A Primary Pegged 

Order specifies that its price will equal 

the inside quote on the same side of the 

market; a Market Pegged Order will 

equal the inside quote on the opposite 

side of the market. A Midpoint Peg 

Order will equal the midpoint of the 

national best bid and offer (‘‘NBBO’’), 

excluding the effect that the Midpoint 

Peg Order itself has on the inside bid or 

inside offer. As the bids and offers 

change, so move the Pegged Orders. A 

Pegged Order may have a limit price 

beyond which the order shall not be 

executed. Primary Peg and Market Peg 

Orders may establish their pricing 

relative to the appropriate bids or offers 

by selecting one or more offset amounts 

that will adjust the price of the order by 

the offset amount selected. 

Under the Exchange’s current rule, 

Midpoint Pegged Orders are not 

displayed, while Primary and Market 

Pegged Orders may be displayed or not 

displayed, at the option of the person 

placing the order. The display of 

Primary Pegs with an offset amount can 

potentially result in excessive 

messaging when multiple venues 

display Pegged non-marketable Orders. 

In these scenarios, it is possible for the 

Primary Pegged Orders on each venue to 

react to and change in relation to each 

other, resulting in excessive messaging 

and ‘‘quote flickering.’’ A rule change to 

eliminate display of Primary Pegged 

Orders with an offset amount will 

prevent this feedback loop, adding to 

system stability and improving market 

quality. 

Market participants retain the ability 

to display orders through other order 

options available under the Exchange 

rules, including by using Primary 

Pegged Orders without an offset amount 

or Market Pegged Orders. Because 

Primary Pegged Orders without an offset 

amount are priced at the inside quote, 

they do not present the same messaging 


Tkelley on DSK3SPTVN1PROD with NOTICES
20658 Federal Register / Vol. 77, No. 66 / Thursday, April 5, 2012 / Notices 

5See Securities Exchange Act Release No. 58375 

(August 18, 2008) 73 FR 49498 (August 21, 2008); 

see also Securities Exchange Act Release No. 57322 

(February 13, 2008), 73 FR 9370 (February 20, 

2008). 

6BATS Rule 11.9(c)(8). 

7 15 U.S.C. 78f(b). 

8 15 U.S.C. 78f(b)(5). 

9 Id. 

10 15 U.S.C. 78s(b)(3)(A). 

11 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. 12 17 CFR 200.30–3(a)(12). 

problem. Rapid updates to displayed 

Primary Pegged Orders may still occur, 

but are more likely to be the result of 

rapid trading. Market Pegged Orders, in 

contrast to Primary Pegs with an offset 

amount, are typically priced to execute 

and rarely post, and thus also do not 

present the excessive messaging 

problem. 

The Commission approved the nondisplay of Pegged Orders when it 

approved the application of BATS 

Exchange, Inc. (‘‘BATS’’), for 

registration as a national securities 

exchange and found BATS’ proposed 

rules consistent with Section 6 of the 

Act.5 BATS Rule 11.9(c)(8) provides that 

Pegged Orders ‘‘are not displayed on the 

Exchange.’’ 6

2. Statutory Basis 

The proposed rule change is 

consistent with Section 6(b) of the Act,7

in general, and furthers the objectives of 

Section 6(b)(5),8 in particular, in that it 

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 

facilitating transactions in securities, 

and to remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system. Non-display of Primary Pegged 

Orders with an offset amount will 

minimize excess messaging that 

distracts from, rather than improves 

transparency and stability. Market 

participants can elect to display orders 

by using other available order types. 

The Exchange believes that the 

proposed change to Rule 3301(f)(4) 

meets the requirements of Section 

6(b)(5) of the Act 9 in that it will 

improve the stability, quality and 

transparency of the national market 

system. 

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 that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. Specifically, 

the Exchange believes that providing for 

non-display of Primary Pegged Orders 

will not burden competition since at 

least one other exchange currently offers 

the same attribute for pegged orders. 

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 

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 10 and Rule 19b– 

4(f)(6) thereunder.11

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–2012–39 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–2012–39. 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–2012–39 and should 

be submitted on or before April 26, 

2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–8168 Filed 4–4–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66699; File No. SR– 

NASDAQ–2012–041] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Related to NonDisplay of Primary Pegged Orders With 

an Offset Amount 

March 30, 2012. 

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

Securities Exchange Act of 1934 


Tkelley on DSK3SPTVN1PROD with NOTICES