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
1100 Federal Register / Vol. 77, No. 5 / Monday, January 9, 2012 / Notices 

5See Exchange Rule 1090, Commentary .01(a). 

Further, no stock execution clerk shall: (i) Act as 

an intermediary in any transaction other than under 

the direct supervision of a member; (ii) enter into 

any clearing transaction or participate in any 

clearing process; (iii) have discretion or 

independent authority over any account or 

transaction. See Exchange Rule 1090, Commentary 

.01(d). 

6A Registered Options Trader (‘‘ROT’’) includes 

a SQT, a RSQT and a Non-SQT, which by definition 

is neither a SQT or a RSQT. A Registered Option 

Trader is defined in Exchange Rule 1014(b) as a 

regular member or a foreign currency options 

participant of the Exchange located on the trading 

floor who has received permission from the 

Exchange to trade in options for his own account. 

See Exchange Rule 1014(b)(i) and (ii). 

7See Exchange Rule 1090, Commentary .01(b). 

8See Securities Exchange Act Release No. 42365 

(January 28, 2000), 65 FR 5922 (February 7, 2000) 

(SR–Phlx–99–46). 

9See Securities Exchange Act Release No. 46505 

(September 17, 2002), 67 FR 60273 (September 25, 

2002) (SR–Phlx–2001–104). The Exchange notes 

that only Exchange members may bid for and offer 

securities in the open market on the Exchange 

Floor. See Exchange Rule 104. 

10See Rule 1090 at Commentary .01 and 02. 

11See Securities Exchange Act Release No. 46505 

(September 17, 2002), 67 FR 60273 (September 25, 

2002) (SR–Phlx–2001–104). See also Section 

15(b)(8) of the Act. 

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

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

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 eliminate the category of 

stock execution clerk from the 

Exchange’s Rules. This registration 

capacity is outdated and no longer 

necessary. 

A stock execution clerk is currently 

defined in Exchange Rule 1090 as any 

clerk other than a specialist clerk on the 

Exchange trading floor who functions as 

an intermediary in a transaction (i) 

Consummated on the Exchange; (ii) 

entered verbally for execution other 

than on the Exchange; or (iii) entered 

into a third party system designed to 

execute transactions other than on the 

Exchange.5 A stock execution clerk is 

intended to provide a service to 

Exchange members on the Options Floor 

by accepting orders for the purchase and 

sale of securities underlying options 

transactions. Once such orders are 

accepted, the stock execution clerk 

forwards such orders to the appropriate 

marketplace for execution. The 

transactions executed are typically 

hedging transactions in underlying 

stocks for Exchange specialists and 

Registered Options Traders.6 Any 

member or member organization 

engaged as a stock execution clerk is 

required to register that person as such 

with the Exchange’s Membership 

Department. A stock execution clerk 

that performs any function other than a 

solely clerical or ministerial function 

shall, prior to performing any function 

as a stock execution clerk, (i) Comply 

with the registration requirement(s) set 

forth in Exchange Rule 604, where 

applicable; (ii) disclose in detail to the 

Exchange, on an annual basis, the 

specific nature of such additional 

function(s); and (iii) in accordance with 

Exchange Rule 748, submit to the 

Exchange written supervisory 

procedures relating to such member or 

member organization’s activities as a 

stock execution clerk.7

In 1999, the Exchange adopted 

Exchange Rule 620 entitled ‘‘Trading 

Floor Registration’’ and required all 

trading floor personnel, including 

clerks, interns, stock execution clerks 

and other associated persons of a 

member to register with the Exchange in 

order to more efficiently monitor 

individuals on the Exchange’s trading 

floor and their current status.8 In 2001, 

the Exchange adopted Rule 1090 

entitled ‘‘Clerk’’ to specifically define a 

clerk as any registered on-floor person 

employed by or associated with a 

member or member organization who is 

not a member and is not eligible to 

effect transactions on the Options Floor 

as a Specialist, Registered Options 

Trader, or Floor Broker in order to 

identify a category of all persons that are 

not members of the Exchange and who 

are not eligible to effect transactions, but 

are located on the Exchange’s Options 

Floor.9 Further, the Exchange 

specifically identified two types of 

clerks, a stock execution clerk and a 

specialist clerk.10 In that rule change, 

the Exchange noted that stock execution 

clerks must clear transactions through a 

NASD (now the Financial Industry 

Regulatory Authority or ‘‘FINRA’’) 

member firm, and determine whether 

their activities as stock execution clerks 

require them to be registered as NASD 

(now FINRA) members.11 The Exchange 

intended that the activities of stock 

execution clerks should be conducted 

consistently with the Act and the rules 

and regulations thereunder. 

The Exchange is proposing to 

eliminate this registration category 

because there are no clerks registered as 

a stock execution clerks today on the 

trading floor. There are still persons 

registered as clerks and specialist clerks 

pursuant to Rule 1090, but there are not 

individuals performing the duties of a 

stock execution clerk at the Exchange, 

nor has there been for some time. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act 12 in general, and furthers the 

objectives of Section 6(b)(5) of the Act 13

in particular, in that it is designed to 

promote just and equitable principles of 

trade, 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, by 

eliminating a registration category that 

is no longer necessary. Today, the 

function of a stock execution clerk has 

become largely automated. The 

transactions that were handled by stock 

execution clerks take place off-floor 

today and mostly occur electronically. 

This type of business is not conducted 

on the Exchange’s trading floor today. 

For these reasons and in the interest of 

maintaining current and updated Rules, 

the Exchange believes that eliminating 

the stock execution clerk category 

provides greater clarity to members. 

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 

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 


tkelley on DSK3SPTVN1PROD with NOTICES
Federal Register / Vol. 77, No. 5 / Monday, January 9, 2012 / Notices 1101 

14 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See ISE Fee Schedule, page 18 (footnote 3). 

4See ISE Schedule of Fees, page 9. 

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 

No. SR–Phlx–2011–178 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 No. 

SR–Phlx–2011–178. 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 No. SR–Phlx–2011– 

178 and should be submitted on or 

before January 30, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–95 Filed 1–6–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66082; File No. SR–C2– 

2011–041] 

Self-Regulatory Organizations; C2 

Options Exchange, Incorporated; 

Notice of Filing and Immediate 

Effectiveness of a Proposed Rule 

Change To Amend the Fees Schedule 

With Respect to Public Customer 

Maker/Taker Fee (Rebate) and 

Connectivity Charges 

January 3, 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 December 

20, 2011, the C2 Options Exchange, 

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

C2 proposes to amend its Fees 

Schedule. The text of the proposed rule 

change is available on the Exchange’s 

Web site (http://www.cboe.org/legal), 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 

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 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 Exchange proposes to amend its 

Fees Schedule. First, the Exchange 

proposes to amend its Maker and Taker 

fees and rebates with regards to Public 

Customer complex orders. Currently, 

the Exchange provides a Maker rebate of 

$0.25 per contract for such orders, and 

assesses no Taker fee. However, for 

competitive reasons, the Exchange 

desires to offer improved pricing for 

Public Customer complex orders. The 

International Securities Exchange, LLC 

(‘‘ISE’’) provides rebates of $0.30 per 

contract for both Makers and Takers for 

complex orders that trade with noncustomer orders in select high-volume, 

competitive classes.3 The Exchange 

hereby proposes to provide a rebate of 

$0.35 per contract for both Makers and 

Takers for complex orders, regardless of 

with whom such orders trade. By 

providing a higher rebate, and not 

limiting with whom such orders can 

trade nor in which classes the new 

rebates apply, the Exchange intends to 

attract a higher volume of customer 

trades and thereby provide other market 

participants with higher liquidity and 

greater trading opportunities. 

The Exchange also proposes to 

increase the fees charged for access to a 

Network Access Port (1 Gigabyte) to 

$500 per month for regular access and 

$1000 per month for Sponsored User 

access. The Exchange recently made a 

sizable investment to upgrade the 

equipment involved in the Network 

Access Port, and thereby proposes to 

increase the fees in order to recoup such 

costs and maintain such equipment in 

the future. The Exchange currently 

charges a different rate for regular access 

and Sponsored User access, and merely 

proposes to increase the rates in equal 

proportion. Moreover, this change in 

Network Access Port fees is in line with 

the amounts assessed for similar access 

at other exchanges. ISE assesses a fee of 

$500 for network access up to and 

including 1 gigabyte.4 Chicago Board 

Options Exchange, Incorporated 

(‘‘CBOE’’) also recently submitted a 

proposed rule change to increase the 

fees charged for access to a Network 

Access Port (1 Gigabyte) to $500 per 


tkelley on DSK3SPTVN1PROD with NOTICES