Federal Register / Vol. 75, No. 86 / Wednesday, May 5, 2010 / Notices 24771 

12 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(6). 

5See Exchange Act Release No. 61152 (Dec. 10, 

2009), 74 FR 66699 (Dec. 16, 2009). 

SR–NYSEAmex–2010–37 and should be 

submitted on or before May 26, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–10458 Filed 5–4–10; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–61987; File No. SR–C2– 

2010–001] 

Self-Regulatory Organizations; C2 

Options Exchange, Incorporated; 

Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change To Adopt Certain Order 

Routing and Market-Maker Rules 

April 27, 2010. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on April 23, 

2010, C2 Options Exchange, 

Incorporated (‘‘Exchange’’ or ‘‘C2’’) 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 Exchange. 

The Exchange filed the proposal as a 

‘‘non-controversial’’ proposed rule 

change pursuant to Section 

19(b)(3)(A)(iii) of the Act3 and Rule 

19b–4(f)(6) thereunder.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 

The Exchange proposes to adopt a 

rule relating to order routing to other 

exchanges and to adopt preferred 

market-maker rules. The text of the 

proposed rule change is available on the 

Exchange’s Web site (http:// 

www.cboe.org/Legal), at the Exchange’s 

Office of the Secretary and at the 

Commission. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, C2 

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 

C2 was recently registered as a 

national securities exchange under 

Section 6 of the Exchange Act.5 When 

operational, C2 will operate an allelectronic marketplace for the trading of 

listed options. It will not maintain a 

physical trading floor. C2 is filing this 

proposed rule change in order to add a 

linkage order routing rule. The rule is 

identical to a rule adopted by the 

Chicago Board Options Exchange, 

Incorporated (‘‘CBOE’’) as part of the 

transition to the new intermarket 

linkage plan (the Options Order 

Protection and Locked/Crossed Market 

Plan). Under the new linkage, exchanges 

ensure order protection by routing 

orders to other markets through brokerdealers. The proposed rule adopts 

certain guidelines that would be 

applicable to any routing services 

provided by C2 through a broker-dealer. 

Routing services would be available to 

C2 permit holders only and are optional. 

Permit holders that do not want orders 

routed can use the Immediate or Cancel 

designation to avoid routing. 

As proposed, routing services will 

only be provided by routing brokers that 

are not affiliated with the Exchange. 

Further, the Exchange may not use a 

routing broker for which the Exchange 

or any affiliate of the Exchange is the 

designated examining authority. For 

each routing broker used by the 

Exchange, an agreement will be in place 

between the Exchange and the routing 

broker that will, among other things, 

restrict the use of any confidential and 

proprietary information that the routing 

broker receives to legitimate business 

purposes necessary for routing orders at 

the direction of the Exchange. 

The rule further requires the 

Exchange to provide routing services in 

compliance with the Securities 

Exchange Act of 1934 and the rules 

thereunder, including, but not limited 

to, the requirements in Section 6(b)(4) 

and (5) of the Act that the rules of a 

national securities exchange provide for 

the equitable allocation of reasonable 

dues, fees, and other charges among its 

members and issuers and other persons 

using its facilities, and not be designed 

to permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

The rule also requires the Exchange to 

establish and maintain procedures and 

internal controls reasonably designed to 

adequately restrict the flow of 

confidential and proprietary 

information between the Exchange and 

the routing broker, and any other entity, 

including any affiliate of the routing 

broker, and, if the routing broker or any 

of its affiliates engages in any other 

business activities other than providing 

routing services to the Exchange, 

between the segment of the routing 

broker or affiliate that provides the other 

business activities and the segment of 

the routing broker that provides the 

routing services. 

Under the proposed rule, the 

Exchange will determine the logic that 

provides when, how, and where orders 

are routed away to other exchanges. 

Further, the routing broker cannot 

change the terms of an order or the 

routing instructions, nor does the 

routing broker have any discretion about 

where to route an order. Lastly, the rule 

provides that any bid or offer entered on 

the Exchange routed to another 

exchange via a routing broker that 

results in an execution shall be binding 

on the member that entered such bid/ 

offer. 

The filing also proposes to adopt a 

Preferred Market-Maker rule and a 

participation entitlement for Preferred 

Market-Makers (PMMs). The proposed 

additions are virtually identical to rules 

governing the PMM program on CBOE. 

A PMM program allows order senders to 

designate a preferred Market-Maker for 

orders sent to the Exchange. If the PMM 

meets certain requirements at the time 

the order is received, the PMM is 

entitled to an enhanced participation on 

the trade (a participation entitlement). 

Adopting a PMM program will provide 

C2 with greater flexibility in attracting 

dedicated liquidity providers. 

Proposed Rule 8.13 provides that the 

Exchange may allow, on a class-by-class 

basis, for the receipt orders that carry a 

designation specifying a Market-Maker 

in that class as the ‘‘Preferred MarketMaker’’ for that order. The PMM will 

receive a participation entitlement for 

such order if the following provisions 

are met: (i) The PMM is registered in the 

relevant option class; and (ii) the PMM 

is quoting at the best bid/offer on the 

Exchange. The participation entitlement 

shall be 40% when there are two or 

more Market-Makers also quoting at the 


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24772 Federal Register / Vol. 75, No. 86 / Wednesday, May 5, 2010 / Notices 

6Under Rule 8.5(a)(1), C2 Market-Makers must 

maintain a continuous (99% of the time) two-sided 

market in 60% of the series of each registered class 

that have time to expiration of less than nine 

months. 

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

8 17 CFR 240.19b–4(f)(6). 

9The text of the proposed rule change is available 

on the Commission’s Web site at http:// 

www.sec.gov/rules/sro.shtml. 

10 17 CFR 200.30–3(a)(12). 

NBBO on the Exchange, and 50% when 

there is only one other Market-Maker 

quoting at the NBBO on the Exchange. 

In addition: (i) A PMM may not be 

allocated a total quantity greater than 

the quantity that the PMM is quoting at 

the best bid/offer on the Exchange; (ii) 

the participation entitlement rate is 

based on the number of contracts 

remaining after all public customer 

orders in the book at the best bid/offer 

on the Exchange have been satisfied; 

and (iii) if a Preferred Market-Maker 

receives a PMM participation 

entitlement, then no other participation 

entitlements shall apply to such order. 

PMMs will be subject to heightened 

quoting requirements. More specifically, 

PMMs must comply with the quoting 

obligations applicable under Exchange 

rules and must provide continuous 

electronic quotes in at least 90% of the 

series of each class for which it receives 

Preferred Market-Maker orders.6

Proposed Rule 8.13 also allows the 

Exchange to implement a PMM program 

for complex orders. The program is 

substantially similar to the program for 

straight orders and is identical to the 

program in place for CBOE. 

Corresponding changes to Rule 6.12 

are also proposed to ensure that the 

order execution and priority rule 

contemplates a participation entitlement 

for PMMs. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with Section 

6(b) of the Exchange Act in general and 

furthers the objectives of Section 6(b)(5) 

in particular in that, by making the 

linkage process more efficient and 

ensuring certain safeguards are in place 

when routing firms are used, it should 

promote just and equitable principles of 

trade, serve to remove impediments to 

and perfect the mechanism of a free and 

open market and a national market 

system, and protect investors and the 

public interest. Moreover, the Exchange 

believes that adopting these rules will 

facilitate the trading of options in a 

national market system by establishing 

more transparent routing guidelines, 

and will facilitate the ability of 

preferred Market-Makers to provide 

deeper liquidity. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

C2 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 neither solicited nor 

received comments on the proposal. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing rule 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 selfregulatory 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 7 and Rule 

19b–4(f)(6) thereunder.8 At any time 

within 60 days of the filing of such 

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–C2–2010–001 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–C2–2010–001. 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,9 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 C2. 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–C2–2010–001 and should 

be submitted on or before May 26, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–10459 Filed 5–4–10; 8:45 am] 

BILLING CODE 8010–01–P 

DEPARTMENT OF STATE 

[Public Notice 6598] 

U.S. National Commission for UNESCO 

Notice of Meeting 

The 2010 Annual Meeting of the U.S. 

National Commission for the United 

Nations Educational, Scientific, and 

Cultural Organization (UNESCO) will 

take place on Wednesday, May 26, 2010 

and Thursday, May 27, 2010, at the 

Embassy Suites in Washington, DC (900 

10th Street, NW.). On Wednesday, May 

26 from 9 a.m. to 12 p.m. and from 2 

p.m. to approximately 6:30 p.m., the 

Commission will hold a series of 


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