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
8600 Federal Register / Vol. 74, No. 36 / Wednesday, February 25, 2009 / Notices 

5 In approving this proposed rule change, the 

Commission has considered the proposed rule’s 

impact on efficiency, competition, and capital 

formation. See 15 U.S.C. 78c(f). 6 15 U.S.C. 78f(b)(5). 

7 15 U.S.C. 78f(b)(8). 

8See Securities Exchange Act Release Nos. 58088 

(July 2, 2008), 73 FR 39747 (July 10, 2008) (SR– 

CBOE–2008–16); 58224 (July 25, 2008), 73 FR 

44303 (July 30, 2008) (SR–ISE–2007–94); and 59081 

(December 11, 2008), 73 FR 76432 (December 16, 

2008). 

9 15 U.S.C. 78s(b)(2). 

10 15 U.S.C. 78s(b)(2). 

11 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. 

amend Chapter VII, Section 12, which 

currently provides that an Options 

Participant may not execute as principal 

against orders on the limit order book 

they represent as agent unless: (a) 

Agency orders are first exposed on NOM 

for at least three seconds, or (b) the 

Options Participant has been bidding or 

offering on NOM for at least three 

seconds prior to receiving an agency 

order that is executable against such bid 

or offer. In addition, Options 

Participants must expose orders they 

represent as agent for at least three 

seconds before such orders may be 

automatically executed, in whole or in 

part, against orders solicited from 

members and non-member brokerdealers to transact with such orders. 

Under the proposal, these exposure 

periods would be reduced to one 

second. 

III. Discussion and Commission 

Findings 

After carefully reviewing the 

proposed rule change, the Commission 

finds that the proposal is 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 change is consistent with Section 

6(b)(5) of the Act,6 which, among other 

things, requires that the rules of a 

national securities exchange be 

designed to promote just and equitable 

principles of trade, to foster cooperation 

and coordination with persons engaged 

in regulating 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 Commission 

also finds that the proposed rule change 

is consistent with Section 6(b)(8) of the 

Act,7 which requires that the rules of an 

exchange not impose any burden on 

competition that is not necessary or 

appropriate in furtherance of the 

purposes of the Act. 

The Commission believes that, given 

the electronic environment of NASDAQ, 

reducing each of these exposure periods 

from three seconds to one second could 

facilitate the prompt execution of 

orders, while continuing to provide 

market participants with an opportunity 

to compete for exposed bids and offers. 

To substantiate that NASDAQ members 

could receive, process, and 

communicate a response back to 

NASDAQ within one second, NASDAQ 

stated that it distributed a survey to all 

NOM Options Participants. NASDAQ 

stated that the survey results indicated 

that it typically takes not more than 250 

milliseconds for members to receive, 

process, and respond to broadcast 

messages that would be affected by the 

proposal. NASDAQ also stated that all 

eight members that responded to the 

survey indicated that reducing the 

exposure period to one second would 

not impair their ability to participate in 

orders affected by the proposal. Based 

on NASDAQ’s statements regarding the 

survey results, the Commission believes 

that market participants should 

continue to have opportunities to 

compete for exposed bids and offers 

within a one second exposure period. 

Accordingly, the Commission believes 

that it is consistent with the Act for 

NASDAQ to reduce the order handling 

and exposure times discussed herein 

from three seconds to one second. 

The Commission finds good cause to 

approve the proposed rule change prior 

to the thirtieth day after publication for 

comment in the Federal Register. The 

Commission notes that the proposed 

rule change was noticed for a fifteen-day 

comment period, and no comments 

were received. The Commission 

believes that NASDAQ has provided 

reasonable support for its belief that its 

market participants would continue to 

have an opportunity to compete for 

exposed bids and offers if the exposure 

periods were reduced to one second as 

proposed. Finally, the Commission also 

notes that the proposed rule change is 

similar to recently approved proposals 

submitted by the Chicago Board Options 

Exchange, Incorporated, the 

International Securities Exchange, LLC, 

and NASDAQ OMX PHLX, Inc.8

Therefore, the Commission finds good 

cause, consistent with Section 19(b)(2) 

of the Act,9 to approve the proposed 

rule change on an accelerated basis. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,10 that the 

proposed rule change (SR–NASDAQ– 

2009–005), as modified by Amendment 

No. 1, be, and hereby is, approved on an 

accelerated basis. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–4038 Filed 2–24–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59415; File No. SR–NYSE– 

2009–13] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by New York 

Stock Exchange LLC Amending 

Certain NYSE Rules To Reflect That 

Designated Market Makers on the 

Exchange No Longer Act as Agents for 

Orders Entered on the Exchange 

February 18, 2009. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on February 

4, 2009, New York Stock Exchange LLC 

(‘‘NYSE’’ or the ‘‘Exchange’’) 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 self-regulatory 

organization. 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 

certain NYSE rules to reflect that 

Designated Market Makers (‘‘DMMs’’) 

on the Exchange will no longer act as 

agents for orders entered on the 

Exchange. 

The text of the proposed rule change 

is available at http://www.nyse.com, the 

Exchange, 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 


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