1098 Federal Register / Vol. 77, No. 5 / Monday, January 9, 2012 / Notices 

22 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)(iii). 

4 17 CFR 240.19b–4(f)(6). 

5See BOX Rules Chapter V, Section 18. 

6See ISE Rule 723. 

7AIM, PIP and PIM have certain characteristics in 

common with each other. All three mechanisms (a) 

Provide for the opportunity for customer price 

improvement, (b) have certain periods where the 

initial orders are exposed for potential price 

improvement, (c) have certain guidelines regarding 

the types of orders that may be eligible for price 

improvement, and (d) have certain defined rules 

related to the allocation of trades within price 

improvement auctions, although there are 

differences in the way orders are allocated. 

8See C2 Rule 6.51(b)(1)(A). 

9See supra note 5; see also Securities Exchange 

Act Release No. 34–58999 (November 21, 2008), 73 

FR 72536 (November 28, 2008) (SR–BSE–2008–54) 

(order approving proposed rule change to eliminate 

requirement that there be at least three marketmakers quoting in the relevant series for an auction 

to commence). 

10See supra note 6; see also Securities Exchange 

Act Release No. 34–58710 (October 1, 2008), 73 FR 

59008 (October 8, 2008) (SR–ISE–2008–63) (order 

approving proposed rule change to eliminate 

requirement that there be at least three marketmakers quoting in the relevant series for an auction 

to commence). 

11 15 U.S.C. 78s(b)(1). 

12 15 U.S.C. 78f(b). 

13 15 U.S.C. 78f(b)(5). 

information from submissions. You 

should submit only information that 

you wish to make available publicly. All 

submissions should refer to File 

Number SR–Phlx–2011–182, and should 

be submitted on or before January 30, 

2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.22

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–101 Filed 1–6–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66075; File No. SR–C2– 

2011–042] 

Self-Regulatory Organizations; C2 

Options Exchange, Incorporated; 

Notice of Filing and Immediate 

Effectiveness of a Proposed Rule 

Change Related to the Exchange’s 

Automated Improvement Mechanisms 

December 30, 2011. 

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 December 

22, 2011, the C2 Options Exchange, 

Incorporated (‘‘Exchange’’ or ‘‘C2’’) filed 

with the Securities and Exchange 

Commission (the ‘‘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 

proposal as a ‘‘non-controversial’’ 

proposed rule change pursuant to 

Section 19(b)(3)(A)(iii) of the Act 3 and 

Rule 19b–4(f)(6) thereunder.4 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 C2 

Rules 6.51, Automated Improvement 

Mechanism. The text of the proposed 

rule change is available on the 

Exchange’s Web site (http:// 

www.c2exchange.com/Legal/ 

RuleFilings.aspx), at the Exchange’s 

Office of the Secretary 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 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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of the proposed rule 

change is to amend C2 Rule 6.51 to 

eliminate the requirement that there be 

at least three market-makers quoting in 

the relevant series in order for an 

Auction to commence. 

This proposed rule change is based on 

the current rules of the Boston Options 

Exchange Group, LLC (‘‘BOX’’) 5 and the 

International Securities Exchange, LLC 

(‘‘ISE’’) 6 relating to the Price 

Improvement Period (‘‘PIP’’) and Price 

Improvement Mechanism (‘‘PIM’’), 

respectively, which are automated price 

improvement mechanisms similar to 

AIM.7

AIM allows a TPH to submit an 

Agency Order along with a contra-side 

second order (a principal order or a 

solicited order for the same size as the 

Agency Order) into an Auction where 

other participants could compete with 

the Initiating TPH’s second order to 

execute against the Agency Order, 

which guarantees that the Agency Order 

will receive an execution. Once an 

Auction commences, the Initiating TPH 

cannot cancel it.8

C2 Rule 6.51(a)(4) currently requires 

that there be at least three marketmakers quoting in the relevant series for 

an Auction to commence. The Exchange 

is proposing to eliminate this 

requirement. The Exchange does not 

believe that customer orders should be 

denied the benefits of AIM simply 

because there may be less than three 

market-makers quoting in a relevant 

options class at a specific point in time. 

Any concern regarding an Auction 

starting with a lower number of marketmakers quoting in a relevant series is 

offset by the broad participation and 

competition that would be present once 

an Auction commenced. 

In support of this proposal, the 

Exchange notes that both PIP 9 and 

PIM 10 permit auctions to commence 

without the condition that there be a 

minimum number of market-makers 

quoting in the particular series. Further, 

like PIP and PIM, responding to C2 AIM 

auctions is open to all permit holders. 

The Exchange believes that AIM, and in 

turn the customers that benefit from 

AIM, would be disadvantaged if the 

three market-maker requirement 

remained as a condition to start an 

Auction because this requirement 

potentially reduces the number of 

Auctions and, as a result, opportunities 

for price improvement. Because BOX 

and ISE are currently able to offer their 

customers price improvement without a 

minimum quoter requirement in PIP 

and PIM, respectively, the Exchange 

believes it is important for competitive 

purposes that it be able to offer the same 

opportunities for price improvement on 

C2 through AIM. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) 11 and the rules and regulations 

thereunder and, in particular, the 

requirements of Section 6(b) of the 

Act.12 Specifically, the Exchange 

believes the proposed rule change is 

consistent with the Section 6(b)(5) 13

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 


tkelley on DSK3SPTVN1PROD with NOTICES
Federal Register / Vol. 77, No. 5 / Monday, January 9, 2012 / Notices 1099 

14 15 U.S.C. 78s(b)(3)(A). 

15 17 CFR 240.19b–4(f)(6). 

16 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)(1). 

4 17 CFR 240.19b–4. 

open market and a national market 

system, and, in general, to protect 

investors and the public interest. 

In particular, the Exchange believes 

this proposed rule change is a 

reasonable modification designed to 

provide additional flexibility for TPHs 

to obtain executions on behalf of their 

customers while continuing to provide 

meaningful, competitive Auctions. The 

Exchange also believes that that 

proposed rule change will ultimately 

enhance competition in the AIM 

Auctions and provide customers with 

additional opportunities for price 

improvement. The rule change is 

consistent with changes made by other 

exchanges and it serves to remove 

impediments to and to perfect the 

mechanism for a free and open market 

and a national market system by 

allowing more price improvement 

auctions to occur on C2. 

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. 

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 proposal. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing rule 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 from the date on which it 

was filed, or such shorter time as the 

Commission may designate if consistent 

with the protection of investors and the 

public interest, provided that the selfregulatory organization has given 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 proposed rule change 

has become effective pursuant to 

Section 19(b)(3)(A) of the Act 14 and 

Rule 19b–4(f)(6) thereunder.15 At any 

time within 60 days of the filing of such 

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–C2–2011–042 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–C2–2011–042. 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 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 offices 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–C2–2011–042, and should 

be submitted on or before January 30, 

2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–93 Filed 1–6–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66079; File No. SR–Phlx– 

2011–178] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX LLC; Notice of 

Filing of Proposed Rule Change 

Relating to Stock Execution Clerks 

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 

20, 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, 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, pursuant to Section 

19(b)(1) of the Act 3 and Rule 19b–4 

thereunder,4 proposes to eliminate the 

stock execution clerk category from its 

Rules. 

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, on the 

Commission’s Web site at http:// 

www.sec.gov/, 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 


tkelley on DSK3SPTVN1PROD with NOTICES