24750 Federal Register / Vol. 77, No. 80 / Wednesday, April 25, 2012 / Notices 

23See supra note 15. 

24See FINRA Rule 7730. 

25 15 U.S.C. 78s(b)(2). 

26 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 17 CFR 240.19b–4(f)(6). 

TRACE-Eligible Securities.23 Moreover, 

public dissemination of MBS TBA 

transaction information has heretofore 

not existed in the MBS TBA market. The 

dissemination caps allow FINRA to 

implement post-trade price 

transparency in that market 

incrementally. FINRA has represented 

that it will continue to review the 

volume of and liquidity in the MBS 

TBA market and, if warranted in the 

future, may recommend that the 

dissemination caps be set at higher 

levels in order to provide additional 

transparency. 

Lastly, the Commission finds that 

FINRA’s proposed fees for MBS TBA 

market and historic transaction data are 

consistent with Section 15A(b)(5) of the 

Act, which requires, among other 

things, that FINRA rules provide for the 

equitable allocation of reasonable dues, 

fees, and other charges among members 

and issuers and other persons using any 

facility or system which the association 

operates or controls. These fees are 

similar to those that currently apply to 

corporate debt securities and Agency 

Debt Securities.24

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,25 that the 

proposed rule change (SR–FINRA– 

2012–020) be, and it hereby is, 

approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.26

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–9840 Filed 4–24–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66833; File No. SR– 

NYSEArca–2012–32] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Amending NYSE Arca 

Equities Rule 7.31 To Specify How the 

Immediate-or-Cancel Time-in-Force 

Instructions Are Applicable to an MPL 

Order 

April 19, 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 April 10, 

2012, NYSE Arca, Inc. (the ‘‘Exchange’’ 

or ‘‘NYSE Arca’’) filed with the 

Securities and Exchange Commission 

(the ‘‘Commission’’) the proposed rule 

change as described in Items I and II 

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 amend 

NYSE Arca Equities Rule 7.31 to specify 

how the immediate-or-cancel (‘‘IOC’’) 

time-in-force instructions are applicable 

to an MPL Order. The text of the 

proposed rule change is available at the 

Exchange, www.nyse.com, and 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 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend 

NYSE Arca Equities Rule 7.31 to specify 

how the IOC time-in-force instructions 

are applicable to an MPL Order. 

Background 

An MPL Order is a type of Working 

Order that has conditional or 

undisplayed price and/or size. As set 

forth in NYSE Arca Equities Rule 

7.31(h)(5), an MPL Order is a Passive 

Liquidity Order that is priced at the 

midpoint of the PBBO and does not 

trade through a Protected Quotation. An 

MPL Order has a minimum order entry 

size of one share and Users may specify 

a minimum executable size for an MPL 

Order, which must be no less than one 

share. If an MPL Order has a specified 

minimum executable size, it will 

execute against an incoming order that 

meets the minimum executable size and 

is priced at or better than the midpoint 

of the PBBO. If the leaves quantity 

becomes less than the minimum size, 

the minimum executable size restriction 

will no longer be enforced on 

executions. 

If the market is locked or crossed, the 

MPL Order will wait for the market to 

unlock or uncross before becoming 

eligible to trade again. MPL Orders are 

ranked in time priority for the purposes 

of execution as long as the midpoint is 

within the limit range of the order. MPL 

Orders always execute at the midpoint 

and do not receive price improvement. 

MPL Orders are valid for any session, 

but do not participate in auctions. 

Unlike Passive Liquidity Orders, MPL 

Orders are not exclusive to lead market 

makers (‘‘LMM’’) for securities for 

which the Exchange is the primary 

market. Users that choose not to trade 

with MPL Orders may mark incoming 

limit orders with a ‘‘No Midpoint 

Execution’’ designator and such limit 

orders will ignore MPL Orders. MPL 

Orders do not route out of the Exchange 

to other market centers. 

NYSE Arca Equities Rule 7.31 sets 

forth the time-in-force conditions that 

are available for orders entered at the 

Exchange. One such time-in-force 

condition is the IOC condition, which 

provides that a market or limit order 

that is marked IOC is to be executed in 

whole or in part as soon as such order 

is received, and the portion not so 

executed is to be treated as cancelled. 

Proposed Rule Change 

The Exchange proposes to add NYSE 

Arca Equities Rule 7.31(h)(6) to specify 

how the IOC time-in-force conditions 

are applicable to an MPL Order (an 

‘‘MPL–IOC Order’’). Because it is an 

MPL Order, the proposed MPL–IOC 

Order follows the same execution and 

priority rules of an MPL Order, 

including that it would be a Passive 

Liquidity Order that is priced at the 

midpoint of the PBBO, does not trade 

through Protected Quotations, always 

executes at the midpoint, does not 

receive price improvement, does not 

route to other market centers, is not 

limited to LMMs for securities listed on 

the Exchange, and will not trade with 

incoming limit orders with a ‘‘No 

Midpoint Execution’’ designator. 


pmangrum on DSK3VPTVN1PROD with NOTICES
Federal Register / Vol. 77, No. 80 / Wednesday, April 25, 2012 / Notices 24751 

4 15 U.S.C. 78f(b). 

5 15 U.S.C. 78s(b)(3)(A). 

6 17 CFR 240.19b–4(f)(6). 

Because of the IOC attributes, certain 

elements of the MPL Order, by their 

terms, are not applicable to the 

proposed MPL–IOC Order. First, 

because an IOC order cancels if it does 

not immediately execute, Users will not 

be able to specify a minimum 

executable size for the proposed MPL– 

IOC Order. Along those lines, because 

an IOC order cancels if not immediately 

executed, the related aspect of the MPL 

Order concerning the leaves quantity of 

an MPL Order are also inapplicable. 

Second, if a proposed MPL–IOC order 

cannot immediately execute because the 

market is either locked or crossed, 

unlike an MPL Order, an MPL–IOC 

Order would cancel in such a situation. 

The Exchange proposes to identify these 

differences in proposed NYSE Arca 

Equities Rule 7.31(h)(6). In addition, 

because by definition, an IOC order 

executes upon arrival, a proposed MPL– 

IOC order would not execute against 

incoming interest, but against resting 

interest. 

The Exchange proposes one further 

distinction for the MPL–IOC Order. As 

noted above, the minimum share size 

for an MPL Order is one share. The 

Exchange proposes to require that an 

MPL–IOC Order have a minimum entry 

size of one round lot. The Exchange 

believes that this additional requirement 

will reduce the use of this order type by 

market participants that are seeking to 

discover hidden interest at the Exchange 

without any market risk. 

Because of the technology changes 

necessary to implement the proposed 

change, the Exchange will announce the 

implementation date of the MPL–IOC 

Order by Trader Update. 

2. Statutory Basis 

The statutory basis for the proposed 

rule change is Section 6(b)(5) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’),4 which requires the rules of an 

exchange 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. The Exchange believes 

that the proposed rule change promotes 

just and equitable principles of trade 

because it would enable market 

participants to use the existing IOC 

time-in-force conditions with MPL 

Orders. The proposed rule change will 

also provide transparency in the 

Exchange rules of how the IOC time-inforce conditions will apply with MPL 

Orders and which aspects of the MPL 

Orders will be inapplicable. The 

Exchange further believes that the 

proposed rule change will perfect the 

mechanism of a free and open market 

because it adds additional flexibility in 

the use of the IOC time-in-force 

instructions with existing order types at 

the Exchange, thereby providing more 

flexibility to ETP Holders. Finally, the 

Exchange believes that the proposed 

requirement that an MPL–IOC order 

have a minimum entry size of one round 

lot will protect investors and the public 

interest because it will reduce the 

potential for market participants to use 

the MPL–IOC Order to probe the market 

for hidden interest without any 

significant risk. 

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 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the Proposed 

Rule Change and Timing for 

Commission Action 

Because the 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 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 self-regulatory 

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 5 and Rule 

19b–4(f)(6) thereunder.6 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–NYSEArca–2012–32 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–NYSEArca–2012–32. 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–NYSEArca–2012–32 and 

should be submitted on or before May 

16, 2012. 


pmangrum on DSK3VPTVN1PROD with NOTICES
24752 Federal Register / Vol. 77, No. 80 / Wednesday, April 25, 2012 / Notices 

7 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4See Securities Exchange Act Release Nos. 66567 

(March 9, 2012), 77 FR 15413 (March 15, 2012) (SR– 

EDGA–2012–08) (‘‘EDGA Notice’’); 66565 (March 9, 

2012), 77 FR 15422 (March 15, 2012) (SR–EDGX– 

2012–07) (‘‘EDGX Notice’’); 66566 (March 9, 2012), 

77 FR 15417 (March 15, 2012) (SR–ISE–2012–21) 

(‘‘ISE Notice’’ and, with the EDGA Notice and 

EDGX Notice, the ‘‘Notices’’). 

5 In approving the proposed rule changes, the 

Commission has considered their impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). 

6 15 U.S.C. 78f(b). 

7 Id. 

8See Securities and Exchange Act Release No. 

56955 (December 13, 2007); 72 FR 71979 (December 

19, 2007) (SR–ISE–2007–101). 

9Eurex Zu ̈rich and EGD, with the German 

Upstream Owners, are collectively referred to 

herein as the ‘‘non-U.S. Upstream Owners’’ and, 

with ISE Holdings, the ‘‘Upstream Owners’’. 

10See Securities and Exchange Act Release No. 

59135 (December 22, 2008); 73 FR 79954 (December 

30, 2008) (SR–ISE–2008–85). 

11See Securities and Exchange Act Release No. 

60651 (September 11, 2009); 74 FR 47827 

(September 17, 2009) (File Nos. 10–193 and 10– 

194). 

12See Securities and Exchange Act Release No. 

61698 (March 12, 2010); 75 FR 13151 (March 18, 

2010) (approving File Nos. 10–194 and 10–196). 

13 ISE Holdings would continue to be the sole 

member of ISE. 

14See Section 3(a)(27) of the Act, 15 U.S.C. 

78c(a)(27). If EGD decides to change its Resolutions 

or governing documents, as applicable, EGD must 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.7

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2012–9969 Filed 4–24–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66834; File Nos. SR– 

EDGA–2012–08; SR–EDGX–2012–07; SR– 

ISE–2012–21] 

Self-Regulatory Organizations; EDGA 

Exchange, Inc.; EDGX Exchange, Inc.; 

International Securities Exchange, 

LLC; Order Granting Approval of 

Proposed Rule Change Relating to a 

Corporate Transaction in Which SIX 

Swiss Exchange AG Will Transfer Its 

Interest in ISE Holdings, Inc. to a 

Newly Formed Swiss Corporation, 

Eurex Global Derivatives AG 

April 19, 2012. 

I. Introduction 

On March 8, 2012, each of EDGA 

Exchange, Inc (‘‘EDGA’’), EDGX 

Exchange, Inc. (‘‘EDGX’’), International 

Securities Exchange, LLC (‘‘ISE’’ and, 

with EDGA and EDGX, the 

‘‘Exchanges’’), filed with the Securities 

and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) 1 of the Securities Exchange Act 

of 1934 (‘‘Act’’),2 and Rule 19b–4 

thereunder,3 proposed rule changes 

regarding a corporate transaction 

(‘‘Transaction’’) in which SIX Swiss 

Exchange AG (‘‘SIX’’) will transfer its 

50% indirect ownership interest of 

International Securities Holdings, Inc. 

(‘‘ISE Holdings’’) to a newly formed 

Swiss corporation, Eurex Global 

Derivatives AG (‘‘EGD’’), which will 

become a wholly-owned subsidiary of 

Deutsche Bo ̈rse AG (‘‘Deutsche Bo ̈rse’’), 

granting Deutsche Bo ̈rse a 100% 

indirect ownership interest in ISE 

Holdings which, in turn, wholly owns 

ISE and holds a 31.54% indirect interest 

in each of EDGA and EDGX. The 

proposed rule changes were published 

for comment in the Federal Register on 

March 15, 2012.4 The Commission 

received no comment letters on the 

proposed rule changes. 

The Commission has reviewed 

carefully the proposed rule changes and 

finds that the proposed rule changes are 

consistent with the requirements of the 

Act and the rules and regulations 

thereunder applicable to a national 

securities exchange.5 In particular, the 

Commission finds that the proposed 

rule changes are consistent with Section 

6(b) of the Act,6 which, among other 

things, requires a national securities 

exchange to be so organized and have 

the capacity to be able to carry out the 

purposes of the Act and to enforce 

compliance by its members and persons 

associated with its members with the 

provisions of the Act, the rules and 

regulations thereunder, and the rules of 

the exchange, and assure the fair 

representation of its members in the 

selection of its directors and 

administration of its affairs, and provide 

that one or more directors shall be 

representative of issuers and investors 

and not be associated with a member of 

the exchange, broker, or dealer. Section 

6(b) of the Act 7 also requires that the 

rules of the exchange be 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. 

II. Discussion 

The Exchanges have submitted their 

proposed rule changes to (i) effect the 

Transaction in accordance with their 

respective corporate governance 

documents, (ii) amend and restate the 

Amended and Restated Trust Agreement 

(‘‘Trust’’), (iii) file the form of EGD 

Corporate Resolution (‘‘Resolution’’), 

(iv) file the form of Agreement and 

Consent by and between EGD and Eurex 

Zu ̈rich AG (‘‘Eurex Zu ̈rich’’) 

(‘‘Agreement and Consent’’) and (v) 

amend and restate the Amended and 

Restated Bylaws of ISE Holdings 

(‘‘Bylaws’’). 

A. Corporate Structure 

On December 17, 2007, ISE Holdings, 

the direct parent of ISE (and subsequent 

indirect parent of EDGA and EDGX), 

became a direct wholly-owned 

subsidiary of U.S. Exchange Holdings, 

Inc. (‘‘U.S. Exchange Holdings’’), which, 

in turn, is a wholly-owned subsidiary of 

Eurex Frankfurt AG (‘‘Eurex Frankfurt’’, 

and, with Deutsche Bo ̈rse, the ‘‘German 

Upstream Owners’’).8 Eurex Frankfurt is 

a wholly-owned subsidiary of Eurex 

Zu ̈rich 9 which, in turn, is currently 

jointly owned by Deutsche Bo ̈rse and 

SIX. SIX is owned by SIX Group AG 

(‘‘SIX Group’’). 

On December 23, 2008, ISE merged 

the ISE Stock Exchange, LLC, with and 

into Maple Merger Sub, LLC, a whollyowned subsidiary of Direct Edge 

Holdings LLC (‘‘Direct Edge’’).10 As part 

of the same transaction, ISE Holdings 

purchased a 31.54% equity interest in 

Direct Edge. 

On May 7, 2009, Direct Edge’s direct 

subsidiaries, EDGA and EDGX, each 

filed a Form 1 Application with the 

Commission, to own and operate 

registered national securities 

exchanges.11 On March 12, 2010, the 

Commission granted the Form 1 

exchange registration applications of the 

EDGA and EDGX.12

On June 7, 2011, Deutsche Bo ̈rse, SIX 

Group, and SIX signed a definitive 

agreement for the Transaction, which 

would give Deutsche Bo ̈rse a 100% 

indirect ownership interest in the 

currently jointly-owned Eurex Zu ̈rich. 

Deutsche Bo ̈rse currently has a 50% 

direct ownership interest in Eurex 

Zu ̈rich. After the Transaction closes, 

Deutsche Bo ̈rse would also have a 100% 

direct ownership interest in EGD, which 

would have a 50% direct ownership 

interest in Eurex Zu ̈rich.13 Accordingly, 

SIX and SIX Group would no longer 

have an indirect ownership interest in 

the Exchanges. 

Section 19(b) of the Act and Rule 

19b–4 thereunder require a selfregulatory organization (‘‘SRO’’) to file 

proposed rule changes with the 

Commission. Although the Upstream 

Owners are not SROs, the Resolution, 

the Trust and the Bylaws, along with 

other corporate documents, are rules of 

an exchange 14 if they are stated 


pmangrum on DSK3VPTVN1PROD with NOTICES