Federal Register / Vol. 74, No. 80 / Tuesday, April 28, 2009 / Notices 19251 

12 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). 

4Securities Exchange Act Release No. 58721 

(October 2, 2008), 73 FR 59696 (October 9, 2008) 

(SR–NASDAQ–2008–079). 

submissions should refer to File 

Number SR–FINRA–2009–027 and 

should be submitted on or before May 

19, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–9559 Filed 4–27–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59807; File No. SR– 

NASDAQ–2009–036] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to 

Order Routing 

April 21, 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 April 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 and II 

below, which Items have been prepared 

by NASDAQ. NASDAQ has designated 

the proposed rule change as constituting 

a non-controversial 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 

NASDAQ proposes to modify Rule 

4758, Order Routing, to provide market 

participants with the option of entering 

orders that do not check the Nasdaq 

Market Center book prior to routing. 

NASDAQ proposes to implement the 

change with respect to Rule 

4758(a)(1)(A)(i) on or about May 1, 

2009, and will announce the exact date 

of implementation in a NASDAQ Equity 

Trader Alert. NASDAQ proposes to 

implement the change with respect to 

Rules 4758(a)(1)(A)(ii) and (iii) on a date 

in May or June 2009, to be announced 

in a NASDAQ Equity Trader Alert. 

The text of the proposed rule change 

is below. Proposed new language is 

italicized and proposed deletions are in 

brackets. 

4758. Order Routing 

(a) Order Routing Process. 

(1) The Order Routing Process shall be 

available to Participants from 7:00 a.m. 

until 8:00 p.m. Eastern Time, and shall 

route orders as described below: All 

routing of orders shall comply with Rule 

611 of Regulation NMS under the 

Exchange Act. 

(A) The System provides three routing 

options. Of these three, DOT is only 

available for orders ultimately sought to 

be directed to either the New York Stock 

Exchange (‘‘NYSE’’) or [the American 

Stock Exchange (‘‘AMEX’’)] NYSE 

Amex. The System will consider the 

quotations only of accessible markets. 

The three System routing options are: 

(i) DOT (‘‘DOT’’)—under this option, 

after checking the System for available 

shares if so instructed by the entering 

firm, orders are sent to other available 

market centers for potential execution, 

per entering firm’s instructions, before 

being sent to the destination exchange, 

so long as the price at such market 

centers would not violate the Order 

Protection Rule. Any un-executed 

portion will thereafter be sent to the 

NYSE or [AMEX] NYSE Amex, as 

appropriate, at the order’s original limit 

order price. This option may only be 

used for orders with time-in-force 

parameters of either SDAY, SIOC, 

MDAY, MIOC, GTMC or market-onopen/close. Notwithstanding the 

foregoing, orders designated for 

participation in the NYSE or [AMEX] 

NYSE Amex opening or closing 

processes will not check the System for 

available shares prior to routing. 

(ii) Reactive Electronic Only 

(‘‘STGY’’)—under this option, after 

checking the System for available shares 

if so instructed by the entering firm, 

orders are sent to other available market 

centers for potential execution, per 

entering firm’s instructions. When 

checking the book, the System will seek 

to execute at the price it would send the 

order to a destination market center. If 

shares remain un-executed after routing, 

they are posted on the book. Once on 

the book, should the order subsequently 

be locked or crossed by another 

accessible market center, the System 

shall route the order to the locking or 

crossing market center. With the 

exception of the Minimum Quantity 

order type, all time-in-force parameters 

and order types may be used in 

conjunction with this routing option. 

(iii) Electronic Only Scan (‘‘SCAN’’)— 

under this option, after checking the 

System for available shares if so 

instructed by the entering firm, orders 

are sent to other available market 

centers for potential execution, per 

entering firm’s instructions, in 

compliance with Rule 611 under 

Regulation NMS. When checking the 

book, the System will seek to execute at 

the price it would send the order to a 

destination market center. If shares 

remain un-executed after routing, they 

are posted on the book. Once on the 

book, should the order subsequently be 

locked or crossed by another market 

center, the System will not route the 

order to the locking or crossing market 

center. With the exception of the 

Minimum Quantity order type, all timein-force parameters and order types may 

be used in conjunction with this routing 

option. 

Orders that do not check the System 

for available shares prior to routing may 

not be sent to a facility of an exchange 

that is an affiliate of Nasdaq, except for 

orders that are sent to the NASDAQ 

OMX BX Equities Market. 

(B) No change. 

(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 

In SR–NASDAQ–2008–079,4

NASDAQ amended Rule 4758 to 

provide that if an order is routed to the 

New York Stock Exchange (‘‘NYSE’’) or 

NYSE Amex and is designated as 

eligible for posting to the NYSE or 

NYSE Amex book, the order must check 

the NASDAQ book prior to routing. 

Routing of orders eligible to post at 

NYSE or NYSE Amex is conducted 

pursuant to NASDAQ’s DOT routing 

strategy, as described in Rule 


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19252 Federal Register / Vol. 74, No. 80 / Tuesday, April 28, 2009 / Notices 

5Securities Exchange Act Release No. 58135 (July 

10, 2008), 73 FR 40898 (July 16, 2008) (SR– 

NASDAQ–2008–061). 

6Securities Exchange Act Release No. 59153 

(December 23, 2008), 73 FR 80485 (December 31, 

2008) (SR–NASDAQ–2008–098). 

7Securities Exchange Act Release No. 59154 

(December 23, 2008), 73 FR 80468 (December 31, 

2008) (SR–BSE–2008–48). 

8 15 U.S.C. 78f. 

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

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

11 17 CFR 240.19b–4(f)(6). 

12 17 CFR 240.19b–4(f)(6)(iii). In addition, Rule 

19b–4(f)(6)(iii) requires that a self-regulatory 

organization submit to the Commission written 

notice of its intent to file the proposed rule change, 

along with a brief description and text of 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 

4758(a)(1)(A)(i). NASDAQ is now 

proposing to eliminate the requirement, 

as established by SR–NASDAQ–2008– 

079, that such orders check the 

NASDAQ book. The change is a 

response to requests from market 

participants for greater flexibility in the 

instructions that they may provide with 

respect to routing. Under amended Rule 

4758(a)(1)(A)(i), a market participant 

may opt either to access the NASDAQ 

book prior to routing or bypass it. 

Similarly, the market participant may 

specify that the order should access 

liquidity available on one or more of the 

trading venues to which NASDAQ 

routes, or it may opt to have the order 

go directly to its destination exchange. 

In all cases, the order will access 

liquidity available on NASDAQ or other 

trading venues only if the price is 

consistent with the Order Protection 

Rule of Regulation NMS. NASDAQ 

plans to implement the change to Rule 

4758(a)(1)(A)(i) on or about May 1, 

2009, and will announce the exact date 

of implementation in a NASDAQ Equity 

Trader Alert. 

The DOT routing strategy is the only 

strategy under which orders are eligible 

for posting to the books of away 

markets. NASDAQ’s STGY and SCAN 

routing strategies, as described in Rule 

4758(a)(1)(A)(ii) and (iii), currently 

contemplate that orders will check the 

NASDAQ book, route to away markets 

on an immediate-or-cancel basis, and 

return to the NASDAQ book in 

accordance with the time-in-force 

instructions of the order. Under STGY, 

the order will again route if the order’s 

price is subsequently locked or crossed 

by another market center; under SCAN, 

the order remains on the NASDAQ book 

regardless of the price subsequently 

available at away markets. Orders are 

routed to away markets only if an 

execution at the price available at such 

markets would not violate the Order 

Protection Rule of Regulation NMS. At 

a later date in May or June 2009, to be 

announced in a NASDAQ Equity Trader 

Alert, NASDAQ will modify these 

routing strategies to provide market 

participants with the option of having 

their orders not check the NASDAQ 

book before initial routing to away 

markets. In all other respects, the 

routing strategies will remain 

unchanged. 

NASDAQ is also amending Rule 4758 

to provide that if an order does not 

check the NASDAQ book for available 

shares prior to routing, it may not be 

sent to a facility of an exchange that is 

an affiliate of NASDAQ, with the 

exception of orders that are sent to the 

NASDAQ OMX BX Equities Market. In 

SR–NASDAQ–2008–061,5 which was 

filed in anticipation of the acquisition of 

the Boston Stock Exchange (now 

NASDAQ OMX BX) and the 

Philadelphia Stock Exchange (now 

NASDAQ OMX PHLX), NASDAQ 

stipulated that it would not route orders 

to affiliated exchanges unless the orders 

checked the NASDAQ book prior to 

routing. Subsequently, in SR– 

NASDAQ–2008–098,6 NASDAQ 

amended this restriction to provide that 

orders that do not check the NASDAQ 

book may be routed to the NASDAQ 

OMX BX Equities Market on a twelvemonth pilot basis. As detailed in that 

filing and in a related filing by 

NASDAQ OMX BX,7 the lifting of the 

restriction was premised upon (i) 

NASDAQ establishing and maintaining 

procedures and internal controls 

reasonably designed to adequately 

restrict the flow of confidential and 

proprietary information between 

NASDAQ and its facilities (including its 

routing broker) and any other entity, 

and (ii) NASDAQ OMX BX adopting 

rules and undertakings to manage the 

flow of confidential and proprietary 

information between NASDAQ’s routing 

broker and NASDAQ OMX BX and to 

minimize potential conflicts of interest. 

NASDAQ’s other affiliated exchange, 

NASDAQ OMX PHLX, ceased operation 

of its system for trading cash equities 

during the fourth quarter of 2008. As a 

result, NASDAQ does not currently 

route any cash equities orders to 

NASDAQ OMX PHLX. If, however, 

NASDAQ OMX PHLX were to resume 

trading of cash equities, the proposed 

rule language would restrict routing of 

orders to NASDAQ OMX PHLX that did 

not check the NASDAQ book prior to 

routing until such time as NASDAQ and 

NASDAQ OMX PHLX adopted rules 

and procedures comparable to those 

adopted by NASDAQ and NASDAQ 

OMX BX. 

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 change will provide 

functionality that allows members to 

route to away markets without first 

checking the NASDAQ book, in 

response to members’ request for this 

added flexibility. This functionality was 

previously in effect for NASDAQ’s DOT 

routing strategy. The change places 

appropriate restrictions on routing of 

orders to NASDAQ’s affiliated 

exchanges. 

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. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments on the proposed 

rule change were neither solicited nor 

received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the proposed rule change: (i) 

Does not significantly affect the 

protection of investors or the public 

interest; (ii) does not impose any 

significant burden on competition; and 

(iii) 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, the proposed rule change has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 10 and Rule 19b– 

4(f)(6) thereunder.11

A proposed rule change filed under 

19b–4(f)(6) normally may not become 

operative prior to 30 days after the date 

of filing.12 However, Rule 19b– 


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Federal Register / Vol. 74, No. 80 / Tuesday, April 28, 2009 / Notices 19253 

Commission. NASDAQ has satisfied this 

requirement. 

13 Id. 

14See BATS Exchange Rule 11.9(c)(12). 

15See SR–NASDAQ–2009–036, Item 7. 

16For the 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). 

17 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. 

4 15 U.S.C. 78s(b)(3)(A). 

5 17 CFR 240.19b–4(f)(2). 

4(f)(6)(iii) 13 permits the Commission to 

designate a shorter time if such action 

is consistent with the protection of 

investors and the public interest. 

NASDAQ has requested that the 

Commission waive the 30-day operative 

delay. The Commission notes that 

NASDAQ’s proposal is substantially 

similar to the rule of another national 

securities exchange and does not raise 

any new substantive issues.14 NASDAQ 

states that waiving the operative delay 

will allow NASDAQ to compete more 

effectively by putting its new 

functionality in effect without undue 

delay.15 For these reasons, the 

Commission believes that waiving the 

30-day operative delay is consistent 

with the protection of investors and the 

public interest, and designates the 

proposed rule change to be operative 

upon filing with the Commission.16

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–NASDAQ–2009–036 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–2009–036. 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–2009–036 and 

should be submitted on or before May 

19, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–9561 Filed 4–27–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59808; File No. SR– 

NYSEArca–2009–31] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Implementing Fee 

Change 

April 21, 2009. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on April 15, 

2009, NYSE Arca, Inc. (‘‘NYSE Arca’’ or 

the ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(the ‘‘Commission’’) the proposed rule 

change as described in Items I, II and III 

below, which Items have been prepared 

by the self-regulatory organization. 

NYSE Arca filed the proposal pursuant 

to Section 19(b)(3)(A) 4 of the Act and 

Rule 19b–4(f)(2) 5 thereunder. 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 its 

Schedule of Fees and Charges for 

Exchange Services (the ‘‘Schedule’’). 

While changes to the Schedule pursuant 

to this proposal will be effective upon 

filing, the changes will become 

operative on April 15, 2009. A copy of 

this filing is available on the Exchange’s 

Web site at http://www.nyse.com, at the 

Exchange’s principal office 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 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to revise its 

Schedule with respect to fees applied to 

Primary Only Plus (‘‘PO+’’) orders. The 

changes, described below, will become 

operative on April 15, 2009. The 

Exchange believes that the proposed 

changes to the Schedule are equitable in 

that they apply uniformly to our Users. 

Tier 1 and Tier 2 Rates 

For orders routed outside the Book in 

Tapes A, B, or C securities to NASDAQ, 

the Exchange proposes a fee of $0.003 

per share (previously $0.0029). 

Take Tier 

For orders routed outside the Book in 

Tapes A, B, or C securities to NASDAQ, 

the Exchange proposes a fee of $0.003 

per share (previously $0.00285). 


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