15020 Federal Register / Vol. 74, No. 62 / Thursday, April 2, 2009 / Notices 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 59497 

(March 4, 2009), 74 FR 10634 (‘‘Notice’’). 

4See BOX Rules, Chapter V, Section 17, 

Supplementary Material .02. 

5See BOX Rules, Chapter V, Section 17, 

Supplementary Material .03. 

6See BOX Rules, Chapter V, Section 18(e)(i). 

7 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). 

8 15 U.S.C. 78f(b)(5). 

9 15 U.S.C. 78f(b)(8). 

10See Notice. 

11 Id. 

12See e.g., 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) (SR–Phlx–2008–79). 

13 15 U.S.C. 78s(b)(2). 

14 15 U.S.C. 78s(b)(2). 

15 17 CFR 200.30–3(a)(12). 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59638; File No. SR–BX– 

2009–015] 

Self-Regulatory Organizations; 

NASDAQ OMX BX, Inc.; Order Granting 

Accelerated Approval of Proposed 

Rule Change Relating to Reduction of 

Certain Order Handling and Exposure 

Periods on the Boston Options 

Exchange Facility From Three Seconds 

to One Second 

March 27, 2009. 

I. Introduction 

On February 27, 2009, NASDAQ OMX 

BX, Inc. (the ‘‘Exchange’’) 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 Boston Options Exchange 

Facility from three seconds to one 

second. The proposed rule change was 

published for comment in the Federal 

Register on March 11, 2009.3 The 

Commission received no comments on 

the proposal. This order approves the 

proposed rule change on an accelerated 

basis. 

II. Description of the Proposal 

The purpose of the proposed rule 

change is to reduce certain order 

handling and exposure periods in the 

rules of the Boston Options Exchange 

(‘‘BOX’’) from three seconds to one 

second. Specifically, BOX rules provide 

that an Options Participant may not 

cause the execution of an order it 

represents as agent on BOX through the 

use of orders it solicited unless the 

agency order is first exposed to the BOX 

Book for at least three seconds.4 BOX 

rules also provide that an order flow 

provider (‘‘OFP’’) may not execute as 

principal an order it represents as agent 

unless the OFP (i) exposes the order to 

the BOX Book for three seconds; (ii) has 

been bidding or offering on BOX for at 

least three seconds prior to receiving an 

agency order that is executable against 

such bid or offer; or (iii) sends the 

agency order to the Price Improvement 

Period (‘‘PIP’’) or Universal Price 

Improvement Period (‘‘UPIP’’).5 Finally, 

the duration of the PIP, which allows 

Options Participants to designate certain 

orders for price improvement and 

submit such orders to the PIP with a 

matching contra order, is three 

seconds.6 Under the proposal, these 

time 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.7 In particular, the 

Commission finds that the proposed 

rule change is consistent with Section 

6(b)(5) of the Act,8 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,9 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 BOX, 

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 BOX Options 

Participants could receive, process, and 

communicate a response back to BOX 

within one second, BOX stated that it 

distributed a survey to its members that 

would be affected by this proposal or 

that regularly participate in the PIP. 

BOX stated that the survey indicated 

that it typically takes at most 110 

milliseconds for Participants to receive, 

process, and respond to broadcast 

messages related to the PIP or 

facilitation or solicitation related 

broadcasts and for such responses to 

reach BOX.10 BOX also stated that the 

Participants indicated that reducing the 

order exposure period to one second 

would not impair their ability to 

participate in solicitation or facilitation 

orders or orders executed through the 

PIP.11 Based on BOX’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 the Exchange 

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 the Exchange 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 other exchanges.12

Therefore, the Commission finds good 

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

of the Act,13 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,14 that the 

proposed rule change (SR–BX–2009– 

015), be, and hereby is, approved on an 

accelerated basis. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–7353 Filed 4–1–09; 8:45 am] 

BILLING CODE 8010–01–P 

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