Federal Register / Vol. 75, No. 91 / Wednesday, May 12, 2010 / Notices 26827 

7 In approving this proposed rule change, the 

Commission notes that it has considered the 

proposed rule’s impact on efficiency, competition, 

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

8 15 U.S.C. 78f(b)(4). 

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

10 15 U.S.C. 78f(b)(8). 

11 17 CFR 242.603(a). 

12NYSE is an exclusive processor of NYSE depthof-book data under Section 3(a)(22)(B) of the Act, 

15 U.S.C. 78c(a)(22)(B), which defines an exclusive 

processor as, among other things, an exchange that 

distributes information with respect to quotations 

or transactions on an exclusive basis on its own 

behalf. 

13Securities Exchange Act Release No. 59039 

(December 2, 2008), 73 FR 74770 (December 9, 

2008) (SR–NYSEArca-2006–21) (‘‘NYSE Arca 

Order’’). In the NYSE Arca Order, the Commission 

describes in great detail the competitive factors that 

apply to non-core market data products. The 

Commission hereby incorporates by reference the 

data and analysis from the NYSE Arca Order into 

this order. 

14See note 5, supra. 

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

16 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19d–1(c)(2). 

3See Securities Exchange Act Release No. 61753 

(March 22, 2010), 75 FR 15471. 

4 17 CFR 240.19d–1(c)(1). 

5The Commission adopted amendments to 

paragraph (c) of Rule 19d–1 to allow self-regulatory 

organizations (‘‘SROs’’) to submit for Commission 

approval plans for the abbreviated reporting of 

minor disciplinary infractions. See Securities 

Exchange Act Release No. 21013 (June 1, 1984), 49 

FR 23828 (June 8, 1984). Any disciplinary action 

taken by an SRO against any person for violation 

of a rule of the SRO which has been designated as 

a minor rule violation pursuant to such a plan shall 

not be considered ‘‘final’’ for purposes of Section 

19(d)(1) of the Act if the sanction imposed consists 

of a fine not exceeding $2,500 and the sanctioned 

person has not sought an adjudication, including a 

hearing, or otherwise exhausted his or her 

administrative remedies. 

6On March 12, 2010, the Commission approved 

EDGA Exchange’s application for registration as a 

Continued 

device, the Vendor should include only 

the entitled individuals, and not the 

device, in the count. 

III. Discussion 

After careful consideration, the 

Commission finds that the proposed 

rule change is consistent with the 

requirements of the Act and the rules 

and regulations thereunder applicable to 

a national securities exchange.7 In 

particular, it is consistent with Section 

6(b)(4) of the Act,8 which requires 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 parties using its 

facilities, and Section 6(b)(5) of the 

Act,9 which requires, among other 

things, that the rules of a national 

securities exchange be designed to 

promote just and equitable principles of 

trade, 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, and 

not be designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. 

The Commission also finds that the 

proposed rule change is consistent with 

the provisions of Section 6(b)(8) of the 

Act,10 which requires that the rules of 

an exchange not impose any burden on 

competition not necessary or 

appropriate in furtherance of the 

purposes of the Act. Finally, the 

Commission finds that the proposed 

rule change is consistent with Rule 

603(a) of Regulation NMS,11 adopted 

under Section 11A(c)(1) of the Act, 

which requires an exclusive processor 

that distributes information with respect 

to quotations for or transactions in an 

NMS stock to do so on terms that are 

fair and reasonable and that are not 

unreasonably discriminatory.12

The Exchange proposes to 

permanently implement the Subscriber 

Entitlement unit-of-count methodology 

in accordance with the terms set forth 

in the Pilot Program. According to the 

Exchange, the proposed rule change 

would simplify the way it charges for 

NYSE OpenBook by changing the 

methodology for the unit-of-count, and 

this change should reduce the fees and 

administrative costs related to the 

receipt and distribution of NYSE 

OpenBook packages. The Exchange has 

indicated that its experience with the 

Pilot Program has been successful. The 

Commission has reviewed the proposal 

using the approach set forth in the 

NYSE Arca Order for non-core market 

data fees.13 The Commission has 

previously found that NYSE was subject 

to significant competitive forces in 

setting fees for its depth-of-book order 

data in the proposed rule changes that 

established and extended the Pilot 

Program’s revised unit-of-count 

methodology.14 There are a variety of 

alternative sources of information that 

impose significant competitive 

pressures on the NYSE in setting the 

terms for distributing its depth-of-book 

order data. The Commission believes 

that the availability of those 

alternatives, as well as the NYSE’s 

compelling need to attract order flow, 

imposed significant competitive 

pressure on the NYSE to act equitably, 

fairly, and reasonably in setting the 

terms of its proposal. 

Because the NYSE was subject to 

significant competitive forces in setting 

the terms of the proposal, the 

Commission will approve the proposal 

in the absence of a substantial 

countervailing basis to find that its 

terms nevertheless fail to meet an 

applicable requirement of the Act or the 

rules thereunder. An analysis of the 

proposal does not provide such a basis. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,15 that the 

proposed rule change (SR–NYSE–2010– 

22) be, and hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–11258 Filed 5–11–10; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62037; File No. 4–595] 

Self-Regulatory Organizations; Order 

Approving Minor Rule Violation Plan 

for EDGA Exchange, Inc. 

May 5, 2010. 

On March 19, 2010, EDGA Exchange, 

Inc. (‘‘EDGA Exchange’’ or the 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (the 

‘‘Commission’’) a proposed minor rule 

violation plan (‘‘MRVP’’) pursuant to 

Section 19(d)(1) of the Securities 

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

19d–1(c)(2) thereunder.2 The proposed 

MRVP was published for public 

comment on March 29, 2010.3 The 

Commission received no comments on 

the proposal. This order approves EDGA 

Exchange’s proposed MRVP. 

EDGA Exchange’s MRVP specifies 

those uncontested minor rule violations 

with sanctions not exceeding $2,500 

which would not be subject to the 

provisions of Rule 19d–1(c)(1) under the 

Act4 requiring that a self-regulatory 

organization promptly file notice with 

the Commission of any final 

disciplinary action taken with respect to 

any person or organization.5 In 

accordance with Rule 19d–1(c)(2), the 

Exchange proposed to designate certain 

rule violations as minor rule violations, 

and requested that it be relieved of the 

reporting requirements regarding such 

violations, provided it gives notice of 

such violations to the Commission on a 

quarterly basis. EDGA Exchange 

included in its proposed MRVP the 

policies and procedures currently 

included in EDGA Exchange Rule 8.15 

(‘‘Imposition of Fines for Minor 

Violation(s) of Rules’’) and the rule 

violations included in EDGA Exchange 

Rule 8.15.01.6

WReier-Aviles on DSKGBLS3C1PROD with NOTICES

26828 Federal Register / Vol. 75, No. 91 / Wednesday, May 12, 2010 / Notices 

national securities exchange, including the rules 

governing the EDGA Exchange. See Securities 

Exchange Act Release No. 61698, 75 FR 13151 

(March 18, 2010). In the approval order, the 

Commission noted that EDGA Exchange Rule 8.15 

provides for the imposition of fines for minor rule 

violations pursuant to a minor rule violation plan. 

Accordingly, the Commission noted that, EDGA 

Exchange Rule 8.15 provides for the imposition of 

fines for minor rule violations pursuant to a minor 

rule violation plan. Accordingly, the Commission 

noted that as a condition to the operation of EDGA 

Exchange, the Exchange must file a minor rule 

violation plan with the Commission. 

7EDGA Exchange attached a sample form of the 

quarterly report with its submission to the 

Commission. 

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

9 15 U.S.C. 78f(b)(1) and 78f(b)(6). 

10 15 U.S.C. 78f(b)(7) and 78f(d)(1). 

11 17 CFR 240.19d–1(c)(2). 

12 Id. 

13 17 CFR 200.30–3(a)(44). 

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

2 17 CFR 240.19b–4. 

Pursuant to the Exchange’s proposed 

MRVP, under Rule 8.15, the Exchange 

may impose a fine (not to exceed 

$2,500) on a member, an associated 

person of a member, or a registered or 

non-registered employee of a member 

with respect to any rule listed in Rule 

8.15.01. The Exchange shall serve the 

person against whom a fine is imposed 

with a written statement setting forth 

the rule or rules allegedly violated, the 

act or omission constituting each such 

violation, the fine imposed, and the date 

by which such determination becomes 

final or by which such determination 

must be contested. If the person against 

whom the fine is imposed pays the fine, 

such payment shall be deemed to be a 

waiver of such person’s right to a 

disciplinary proceeding and any review 

of the matter under Exchange rules. Any 

person against whom a fine is imposed 

may contest the Exchange’s 

determination by filing with the 

Exchange a written response, at which 

point the matter shall become a 

disciplinary proceeding. 

Upon approval of the plan, the 

Exchange will provide the Commission 

a quarterly report of actions taken on 

minor rule violations under the plan. 

The quarterly report will include the 

Exchange’s internal file number for the 

case, the name of the individual and/or 

organization, the nature of the violation, 

the specific rule provision violated, the 

sanction imposed, the number of times 

the rule violation has occurred, and the 

date of disposition.7

The Commission finds that the 

proposed MRVP is consistent with the 

requirements of the Act and the rules 

and regulations thereunder applicable to 

a national securities exchange. In 

particular, the Commission believes that 

the proposal is consistent with Section 

6(b)(5) of the Act,8 which requires that 

the rules of an exchange be designed to 

promote just and equitable principles of 

trade, to remove impediments and to 

perfect the mechanism of a free and 

open market and national market 

system, and, in general, to protect 

investors and the public interest. The 

Commission also believes that the 

proposal is consistent with Sections 

6(b)(1) and 6(b)(6) of the Act9 which 

require that the rules of an exchange 

enforce compliance with, and provide 

appropriate discipline for, violations of 

the Commission and Exchange rules. In 

addition, because the MRVP offers 

procedural rights to a person sanctioned 

under Rule 8.15, the Commission 

believes that Rule 8.15 provides a fair 

procedure for the disciplining of 

members and persons associated with 

members, consistent with Sections 

6(b)(7) and 6(d)(1) of the Act.10

Finally, the Commission finds that the 

proposal is consistent with the public 

interest, the protection of investors, or 

otherwise in furtherance of the purposes 

of the Act, as required by Rule 19d– 

1(c)(2) under the Act,11 because the 

MRVP strengthens EDGA Exchange’s 

ability to carry out its oversight and 

enforcement responsibilities as an SRO 

in cases where full disciplinary 

proceedings are unsuitable in view of 

the minor nature of the particular 

violation. 

In approving this proposal, the 

Commission in no way minimizes the 

importance of compliance with 

Exchange rules and all other rules 

subject to the imposition of sanctions 

under Rule 8.15. The Commission 

believes that the violation of an SRO’s 

rules, as well as Commission rules, is a 

serious matter. However, Rule 8.15 

provides a reasonable means of 

addressing violations that do not rise to 

the level of requiring formal 

disciplinary proceedings, while 

providing greater flexibility in handling 

certain violations. The Commission 

expects that EDGA Exchange will 

continue to conduct surveillance with 

due diligence and make determinations 

based on its findings, on a case-by-case 

basis, whether a sanction under the 

MRVP is appropriate, or whether a 

violation requires formal disciplinary 

action. 

It is therefore ordered, pursuant to 

Rule 19d–1(c)(2) under the Act,12 that 

the proposed MRVP for EDGA 

Exchange, File No. 4–595, be, and 

hereby is, approved and declared 

effective. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–11260 Filed 5–11–10; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62040; File No. SR–CBOE– 

2010–040] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Adding 75 Options 

Classes to the Penny Pilot Program 

May 5, 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 29, 

2010, the Chicago Board Options 

Exchange, Incorporated (‘‘Exchange’’ or 

‘‘CBOE’’) 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 

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 

CBOE proposes to amend proposes to 

amend [sic] its rules relating to the 

Penny Pilot Program. The text of the 

rule proposal is available on the 

Exchange’s Web site (http:// 

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

Office of the Secretary, at the 

Commission’s Public Reference Room 

and on the Commission’s Web site at 

http://www.sec.gov. 

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, 

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