Federal Register / Vol. 74, No. 36 / Wednesday, February 25, 2009 / Notices 8597 

7 15 U.S.C. 78s(b)(3)(A). 

8 17 CFR 240.19b–4(f)(6). In addition, Rule 19b4(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. 

9 17 CFR 240.19b–4(f)(6). 

10 Id. 

11The Exchange’s proposed rule change is 

substantially identical to a proposed rule change by 

the Chicago Board Options Exchange (‘‘CBOE’’) 

recently approved by the Commission. See 

Securities Exchange Act Release No. 59336 

(February 2, 2009), 74 FR 6332 (February 6, 2009) 

(SR–CBOE–2008–127). 

12For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

and capital formation. See 15 U.S.C. 78c(f). 

13 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). 

4 17 CFR 240.19b–4(f)(6)(iii). 

thus providing investors additional 

opportunities to hedge their positions. 

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 

The Exchange has neither solicited 

nor received comments on the proposed 

rule change. 

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 from the date on 

which it was filed, or such shorter time 

as the Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 7 and Rule 19b– 

4(f)(6) thereunder.8

A proposed rule change filed 

pursuant to Rule 19b-4(f)(6) under the 

Act 9 normally does not become 

operative for 30 days after the date of its 

filing. However, Rule 19b-4(f)(6) 10

permits the Commission to designate a 

shorter time if such action is consistent 

with the protection of investors and the 

public interest. The Exchange requests 

that the Commission waive the 30-day 

operative delay. The Commission notes 

that this proposed rule change is 

substantially identical to a proposed 

rule change that was approved by the 

Commission after an opportunity for 

public comment,11 and does not raise 

any new substantive issues. The 

Exchange requests the waiver of the 30- 

day operative delay so that the proposed 

rule change may become effective and 

operative immediately and allow BOX 

to remain competitive with other 

exchanges. For these reasons, the 

Commission believes that waiving the 

30-day operative delay 12 is consistent 

with the protection of investors and the 

public interest and designates the 

proposal operative upon filing. 

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission may summarily abrogate 

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 e-mail to rulecomments@sec.gov. Please include File 

Number SR–BX–2009–011 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–BX–2009–011. This file 

number should be included on the 

subject line if e-mail 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 inspection and copying 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 publicly available. All 

submissions should refer to File 

Number SR–BX–2009–011 and should 

be submitted on or before March 18, 

2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–3978 Filed 2–24–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59420; File No. SR– 

NASDAQ–2009–011] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change to Establish an 

Exchange Direct Order for the 

NASDAQ Options Market 

February 19, 2009. 

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 February 

17, 2009, The NASDAQ Stock Market 

LLC (‘‘Nasdaq’’) 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 Nasdaq. Nasdaq has filed this 

proposal pursuant to Exchange Act Rule 

19b–4(f)(6) 3 and has provided the 

Commission with the notice required by 

Rule 19b–4(f)(6)(iii).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 Substance of 

the Proposed Rule Change 

Nasdaq proposes to establish a new 

order type for the NASDAQ Options 


pwalker on PROD1PC71 with NOTICES
8598 Federal Register / Vol. 74, No. 36 / Wednesday, February 25, 2009 / Notices 

5Changes are marked to the rule text that appears 

in the electronic manual of Nasdaq found at 

http://nasdaq.cchwallstreet.com. 

6Pursuant to Chapter I, Section 1(a)(40) of the 

NOM Rules, the term ‘‘Options Participant’’ means 

a firm, or organization that is registered with 

Nasdaq for purposes of participating in options 

trading on NOM as a ‘‘Nasdaq Options Order Entry 

Firm’’ or ‘‘Nasdaq Options Market Maker’’. 

7See Nasdaq Equities Rule 4751(f)(9). 

8 15 U.S.C. 78f. 

9 15 U.S.C. 78f(b)(5). 

Market (‘‘NOM’’) that will allow users to 

direct orders to be delivered by the 

system to another exchange without first 

checking the NOM book. 

The text of the proposed rule change 

is below. Proposed new language is 

italicized; proposed deletions are in 

brackets.5

Options Rules 

Chapter VI Trading System 

* * * * * 

Sec. 1 Definitions 

(a)–(d) No change. 

(e) The term ‘‘Order Type’’ shall mean 

the unique processing prescribed for 

designated orders that are eligible for 

entry into the System, and shall include: 

(1)–(6) No change. 

(7) ‘‘Exchange Direct Orders’’ are 

orders that are directed to an exchange 

other than NOM as directed by the 

entering party without checking the 

NOM book. If unexecuted, the order (or 

unexecuted portion thereof) shall be 

returned to the entering party. This 

order type may only be used for orders 

with time-in-force parameters of IOC. 

Directed Orders may not be directed 

to a facility of an exchange that is an 

affiliate of Nasdaq. 

* * * * * 

Sec. 6 Acceptance of Quotes and 

Orders 

All bids or offers made and accepted 

on NOM in accordance with the NOM 

Rules shall constitute binding contracts, 

subject to applicable requirements of the 

Rules of the Exchange and the Rules of 

the Clearing Corporation. 

(a) General—A System order is an 

order that is entered into the System for 

display and/or execution as appropriate. 

Such orders are executable against 

marketable contra-side orders in the 

System. 

(1) All System Orders shall indicate 

limit price and whether they are a call 

or put and buy or sell. Systems Orders 

can be designated as Immediate or 

Cancel (‘‘IOC’’), Good-till-Cancelled 

(‘‘GTC’’), Day (‘‘DAY’’), or Expire Time 

(‘‘EXPR’’). 

(2) A System order may also be 

designated as a Reserve Order, a Limit 

Order, a Minimum Quantity Order, a 

Discretionary Order, a Market Order, 

[or] a Price Improving Order, or an 

Exchange Direct Order. 

(b) No change. 

* * * * * 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

Nasdaq 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. Nasdaq 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 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Nasdaq proposes to implement a new 

order type—the Exchange Direct 

Order—that is well-established for 

equities trading but will now be 

available for use by Options 

Participants.6 Exchange Direct Orders 

will be entered by an Options 

Participant and sent to an options 

market other than NOM without first 

checking the NOM book. Upon entry, 

the Options Participant will select the 

options market to receive the order. If 

unexecuted, the order (or unexecuted 

portion thereof) shall be returned to the 

entering party. The Exchange Direct 

Order will be available only for orders 

with time-in-force parameters of 

Immediate Or Cancel (IOC). 

The Exchange Direct Order type is 

similar to the ‘‘Directed Order’’ in use 

by Nasdaq for cash equities trading 

which permits members of Nasdaq to 

route orders directly to other equity 

markets without first checking the 

Nasdaq book.7 Similar to the processing 

of Directed Orders for equities trading, 

when NOM’s execution system receives 

an Exchange Direct Order, NOM’s 

system will pass that order to NASDAQ 

Options Services, LLC, the Nasdaq 

facility providing routing for NOM. 

NASDAQ Options Services has 

connectivity to route to all of the other 

options markets. NASDAQ Option 

Services will accept orders only from 

NOM, which in turn accepts orders only 

from Nasdaq members. 

This order will provide additional 

flexibility and functionality to Options 

Participants and promote market 

efficiency by providing them the ability 

to better control their access to other 

options markets. In addition, the order 

may promote the entry of new 

participants to the options markets by 

facilitating access to multiple markets. 

Exchange Direct Orders will enhance 

the value of a connection to NOM for 

Nasdaq members who are Options 

Participants and at times want to access 

liquidity at the National Best Bid and 

Offer (NBBO) but do not have 

connections to all other options 

markets. These participants will be able 

to control the liquidity they access, the 

sequence in which the liquidity is 

accessed and the manner in which they 

access the liquidity. 

Options Participants that enter 

Exchange Direct Orders on NOM will be 

subject to applicable routing fees. 

However, at this time Options 

Participants will not be charged a 

separate fee for using this order 

designation. 

2. Statutory Basis 

Nasdaq believes that the proposed 

rule change is consistent with the 

provisions of Section 6 of the Act,8 in 

general, and with Section 6(b)(5) of the 

Act,9 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. The proposed rule 

change would provide additional 

functionality to Nasdaq members using 

NOM and promote the entry of new 

participants to the options markets by 

facilitating access to multiple markets. 

The Commission has already 

determined that this functionality is 

consistent with the Act for use in 

equities trading. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

Nasdaq does not believe that the 

proposed rule change will result in any 

burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act, as amended. 


pwalker on PROD1PC71 with NOTICES
Federal Register / Vol. 74, No. 36 / Wednesday, February 25, 2009 / Notices 8599 

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

11 17 CFR 240.19b–4(f)(6). 

12Securities Exchange Act Release No. 58092 

(July 3, 2008), 73 FR 40144 (July 11, 2008). 

13 Id. at 40149. 

14 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 59310 

(January 28, 2009), 74 FR 5952. 

4Pursuant to Chapter I, Section 1(a)(40) of the 

NOM Rules, the term ‘‘Options Participant’’ means 

a firm, or organization that is registered with the 

Exchange for purposes of participating in options 

trading on NOM as a ‘‘Nasdaq Options Order Entry 

Firm’’ or ‘‘Nasdaq Options Market Maker’’. 

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 

The foregoing rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act 10 and Rule 19b–4(f)(6) 11

thereunder in that it effects a change 

that: (i) Does not significantly affect the 

protection of investors or the public 

interest; (ii) does not impose any 

significant burden on competition; and 

(iii) by its terms, does not become 

operative for 30 days after the date of 

the filing, or such shorter time as the 

Commission may designate if consistent 

with the protection of investors and the 

public interest. 

In its recent guidance on the proposed 

rules of Self-Regulatory Organizations 

(‘‘SROs’’),12 the Commission concluded 

that filings based on the rules of another 

SRO already approved by the 

Commission are eligible for immediate 

effectiveness under Rule 19b–4(f)(6). 

The Commission noted that ‘‘a proposed 

rule change appropriately may be filed 

as an immediately effective rule so long 

as it is based on and similar to another 

SRO’s rule and each policy issue raised 

by the proposed rule (i) has been 

considered previously by the 

Commission when the Commission 

approved another exchange’s rule (that 

was subject to notice and comment), 

and (ii) the rule change resolves such 

policy issue in a manner consistent with 

such prior approval.’’ 13 Nasdaq believes 

that the proposed rule change is ‘‘based 

on and similar to’’ existing order types 

in use for cash equities trading, 

including Equities Rule 4751(f)(9) of 

Nasdaq (‘‘Directed Order’’), Equities 

Rule 7.31(x)(iii) of NYSE Arca (‘‘PO+ 

Order’’) and Rule 11.9(c)(11) of BATS 

(‘‘Modified Destination Specific 

Order’’). The proposed Exchange Direct 

Order for NOM is based on the same 

functionality currently in use and is 

intended to operate in a manner similar 

to these existing order types. 

This rule proposal, which is effective 

upon filing with the Commission, shall 

become operative 30 days after the date 

of the filing. 

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission may summarily abrogate 

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, as amended, 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 e-mail to rulecomments@sec.gov. Please include File 

Number SR–NASDAQ–2009–011 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–NASDAQ–2009–011. This 

file number should be included on the 

subject line if e-mail 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 inspection and copying 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 Nasdaq. 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–NASDAQ–2009–011 and 

should be submitted on or before March 

18, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–4037 Filed 2–24–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59421; File No. SR– 

NASDAQ–2009–005] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Order 

Granting Accelerated Approval of 

Proposed Rule Change as Modified by 

Amendment No. 1 Thereto To Reduce 

Certain Order Exposure Periods on the 

NASDAQ Options Market From Three 

Seconds to One Second 

February 19, 2009. 

I. Introduction 

On January 23, 2009, The NASDAQ 

Stock Market LLC ‘‘NASDAQ’’), filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) pursuant 

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

Exchange Act of 1934 (‘‘Act’’) 1 and Rule 

19b–4 thereunder,2 a proposed rule 

change to reduce certain order exposure 

periods on the NASDAQ Options 

Market (‘‘NOM’’) from three seconds to 

one second. NASDAQ filed Amendment 

1 to the proposed rule change on 

January 27, 2009. The proposed rule 

change, as modified by Amendment No. 

1, was published for comment in the 

Federal Register on February 3, 2009.3

The Commission received no comments 

on the proposal. This order approves the 

proposed rule change, as modified by 

Amendment No. 1, on an accelerated 

basis. 

II. Description of the Proposal 

The purpose of the proposed rule 

change is to reduce the exposure time 

during which Options Participants 4

may not execute as principal against 

orders they represent as agent from 

three seconds to one second. 

Specifically, NASDAQ proposes to 


pwalker on PROD1PC71 with NOTICES