46696 Federal Register / Vol. 73, No. 155 / Monday, August 11, 2008 / Notices 

3See Securities Exchange Act Release No. 58014 

(June 24, 2008), 73 FR 37520. 

4 In approving this proposed rule change, the 

Commission has considered the proposed rule’s 

impact on efficiency, competition, and capital 

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

5 15 U.S.C. 78f(b)(4). 

6 15 U.S.C. 78s(b)(2). 

7 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). 

4Changes are marked to the rule text that appears 

in the electronic Nasdaq Manual found at http:// 

nasdaq.complinet.com. 

Federal Register on July 1, 2008.3 The 

Commission received no comments on 

the proposal. This order approves the 

proposed rule change. 

II. Description of the Proposal 

Nasdaq proposes to amend its fees 

related to orders routed to the NASDAQ 

Options Market (‘‘NOM’’) via the 

Options Linkage to establish a Linkage 

Fee Pilot Program that is effective 

through July 31, 2009 and to clarify the 

application of options transaction fees 

for trades executed through Options 

Linkage on the Exchange. Under this 

pilot, the fees applicable to Nasdaq 

members entering orders directly into 

NOM systems will apply to Nasdaq 

members and non-members that enter 

orders into other options exchanges that 

are then routed to Nasdaq via the 

Options Linkage and executed on NOM. 

Under the Exchange’s current Rule 

7050(1), members are charged a fee of 

$0.45 per executed contract for orders 

entered and then executed on the NOM. 

Nasdaq’s current rule does not 

differentiate between orders entered 

directly into the NOM via Nasdaq 

systems and orders received by Nasdaq 

via the Linkage. Since the launch of the 

NOM, Nasdaq has been assessing the 

same fee for all orders executed on 

behalf of members on its market 

regardless of whether such orders were 

entered directly into Nasdaq systems or 

via the Options Linkage. 

III. Discussion and Commission 

Findings 

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.4 In particular, the 

Commission finds that the proposal is 

consistent with section 6(b)(4) of the 

Act,5 which requires that an exchange 

have rules that provide for the equitable 

allocation of reasonable dues, fees, and 

other charges among its members and 

other persons using its facilities. 

Under the Exchange’s current rule, 

the fee for members entering an order 

that executes on the NOM is $0.45 per 

executed contract. Nasdaq’s current rule 

does not specifically provide that the 

same $0.45 options transaction fee is 

charged for trades routed to Nasdaq via 

the Options Linkage. The Exchange’s 

proposal would establish a Linkage Fee 

Pilot Program, for a period ending July 

31, 2009, that would charge $0.45 per 

executed contract to members or nonmembers entering orders via the 

Options Linkage that execute in NOM. 

Accordingly, the Commission believes 

that the Exchange’s proposed rule 

change and Linkage Fee Pilot Program 

clearly sets forth the fees imposed on 

Linkage Orders. 

Because the Exchange may have 

assessed the options transaction fee on 

Linkage Orders prior to this approval 

and, therefore, without authority, any 

parties assessed the options transaction 

fee for Linkage Orders prior to the 

approval of this proposed rule change 

may seek reimbursement. In addition, 

the Commission notes that the Options 

Linkage fees are assessed pursuant to a 

pilot scheduled to end July 31, 2009 and 

that the Commission is continuing to 

evaluate whether such fees are 

appropriate and consistent with the Act. 

IV. Conclusion 

It is therefore ordered, pursuant to 

section 19(b)(2) of the Act,6 that the 

proposed rule change (SR–NASDAQ–

2008–055) be, and hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.7

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–18427 Filed 8–8–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58305; File No. SR–

NASDAQ–2008–063] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

a Proposed Rule Change To Modify the 

Rules Governing the Requirements for 

Market Maker Quotations on the 

NASDAQ Options Market 

August 5, 2008. 

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 July 15, 

2008, The NASDAQ Stock Market LLC 

(‘‘NASDAQ’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III 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 Chapter 

VII, Section 6 of the Nasdaq rules 

governing the requirements for market 

maker quotations on the NASDAQ 

Options Market (‘‘NOM’’). The text of 

the proposed rule change is below. 

Proposed new language is italicized; 

proposed deletions are in brackets.4

* * * * * 

Chapter VII, Sec. 6 Market Maker 

Quotations 

(a) Size Associated with Quotes. A 

Market Maker’s bid and offer for a series 

of options contracts shall be 

accompanied by the number of contracts 

at that price the Market Maker is willing 

to buy or sell. The best bid and best 

offer entered by a Market Maker must 

have a size of at least [ten (10)] one (1) 

contract[s]. 

(b)–(e) 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 

On March 12, 2008, the Commission 

approved SR–NASDAQ–2007–004 and 

SR–NASDAQ–2007–080, proposals to 

create the NASDAQ Options Market or 


rmajette on PRODPC74 with NOTICES
Federal Register / Vol. 73, No. 155 / Monday, August 11, 2008 / Notices 46697 

5Securities Exchange Act Release No. 57478 

(March 12, 2008), 73 FR 14521 (March 18, 2008) 

(order approving SR–NASDAQ–2007–004 and 

2007–080). 

6 Id. at 14527 (footnotes omitted). 

7 Id. at note 92. 

8http://www.nyse.com/pdfs/ 

Options_MM_Orientation_Manual.pdf at page 2. 

9 15 U.S.C. 78f. 

10 15 U.S.C. 78f(b)(5). 

11 15 U.S.C. 78s(b)(3)(A). 

12 17 CFR 240.19b–4(f)(6). 

NOM.5 NOM has been performing above 

expectations since NASDAQ launched 

trading on March 31, 2008. There are 

multiple firms registered as market 

makers and over two dozen additional 

firms providing liquidity through 

NOM’s system. NOM’s market share of 

listed options continues to grow 

although NOM trades only a small 

percentage of all available options 

classes and series. Despite this early 

success, NASDAQ continues to monitor 

the market to identify instances where 

market efficiency can be enhanced. 

NASDAQ believes that the efficiency 

of its market can be enhanced by 

permitting market makers to enter 

quotations for one or more contracts 

rather than requiring that they enter 

quotations for 10 or more contracts in 

series in which they are registered. 

NASDAQ projects that modifying the 

quotations requirements in this manner 

will encourage more options trading 

firms to register as market makers on 

NOM and to provide more liquidity to 

NOM participants. An overall increase 

in liquidity will benefit investors and 

serve the public interest. 

The NOM Rules will continue to 

ensure that market makers actively 

quote. For example, NOM Rule Chapter 

VII, Section 6(d)(i) states that, on a daily 

basis, a market maker must maintain 

continuous two-sided quotations and 

participate in the pre-opening phase in 

75% of the options series in which the 

market maker is registered. In addition, 

NOM provides functionality that allows 

registered market makers to 

automatically input a quotation on the 

side of the market that has been 

depleted. Moreover, pursuant to 

paragraph (d)(ii) of Section 6, Nasdaq 

Regulation may call upon a market 

maker registered in a particular series to 

maintain continuous bids or offers. 

Thus, Nasdaq may require a market 

maker to continuously quote if it is the 

only registered market maker in the 

series. 

NASDAQ believes that this proposal 

is consistent with the Act and also with 

the Commission’s well-settled position 

that the Act does not mandate any 

particular market model: 

The Commission agrees that the Act does 

not mandate a particular market model for 

national securities exchanges, and believes 

that many different types of market models 

could satisfy the requirements of the Act. The 

Commission does not believe that the Act 

requires an exchange to have market makers. 

Although Market Makers could be an 

important source of liquidity on NOM, they 

likely will not be the only source. In 

particular, the NOM System is designed to 

match buying and selling interest of all 

Participants on NOM. The Commission 

therefore believes that the NOM structure is 

consistent with the Act.6

The Commission went on to note that 

‘‘[i]n its release adopting Regulation 

ATS, the Commission rejected the 

suggestion that a guaranteed source of 

liquidity was a necessary component of 

an exchange’’ and that the approved 

rules of the Archipelago Exchange did 

not include a market maker 

requirement.7

Nasdaq’s proposal is also consistent 

with the current practice of the NYSE/ 

Arca Exchange of permitting options 

market makers to enter quotations for 

one contract. The NYSE/Arca Options 

Market Maker Orientation Manual states 

that a market maker quotation must be 

entered for a minimum of one contract: 

All Market Makers must contribute to the 

maintenance of a fair and orderly market. 

Market Makers must honor the number of 

contracts entered into the system in all series 

of options classes within their Appointment. 

Any change to a quote (including reduction 

of volume) causes the quote to lose priority. 

The minimum size is one contract. Neither 

LMMs or MMs are required to quote on the 

Opening Auction. (emphasis added).8

Nasdaq proposes to adopt the same 

requirement and to make it transparent 

by including it in Nasdaq’s official rule 

manual. 

2. Statutory Basis 

Nasdaq believes that the proposed 

rule change is consistent with the 

provisions of Section 6 of the Act,9 in 

general and with Section 6(b)(5) of the 

Act,10 in particular, in that it is designed 

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; and are not designed to 

permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

The proposed changes are consistent 

with the statute in that they are 

designed to facilitate transactions in 

options on the Nasdaq Options Market 

by encouraging participants to provide 

liquidity through Nasdaq’s system. If the 

proposal succeeds in attracting 

additional liquidity providers and 

additional liquidity, the Nasdaq system 

will then match more buying and selling 

interest between and among all NOM 

participants. 

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. To the 

contrary, the proposal is designed to 

enhance competition and is based upon 

the rules of another national securities 

exchange that trades standardized 

options. 

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 

Nasdaq has designated this rule filing 

as non-controversial under Section 

19(b)(3)(A) of the Act,11 and Rule 19b–

4(f)(6) thereunder.12 Nasdaq believes 

that the rule change should take effect 

immediately upon filing because it will 

effect a change that: (1) Does not 

significantly affect the public interest or 

the protection of investors, and (2) does 

not impose any significant burden on 

competition, and (3) does not become 

operative for 30 days after the date of 

this filing. As such, the proposal is 

effective upon filing with the 

Commission. Nasdaq intends to make 

this rule proposal operative 30 days 

after the date of filing. 

At any time within 60 days of the 

filing of such proposed rule change, the 

Commission may summarily abrogate 

the 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 the 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: 


rmajette on PRODPC74 with NOTICES
46698 Federal Register / Vol. 73, No. 155 / Monday, August 11, 2008 / Notices 

13 17 CFR 200.30–3(a)(12). 

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 

No. SR–NASDAQ–2008–063 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NASDAQ–2008–063. 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 such 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–2008–063 and 

should be submitted on or before 

September 2, 2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–18459 Filed 8–8–08; 8:45 am] 

BILLING CODE 8010–01–P 

SMALL BUSINESS ADMINISTRATION 

[Disaster Declaration #11353 and #11354] 

Texas Disaster #TX–00297 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Notice. 

SUMMARY: This is a Notice of the 

Presidential declaration of a major 

disaster for the State of Texas (FEMA–

1780–DR), dated 07/31/2008. 

Incident: Hurricane Dolly. 

Incident Period: 07/22/2008 and 

continuing. 

DATES: Effective Date: 07/31/2008. 

Physical Loan Application Deadline 

Date: 09/30/2008. 

Economic Injury (Eidl) Loan 

Application Deadline Date: 05/01/2009. 

ADDRESSES: Submit completed loan 

applications to: U.S. Small Business 

Administration, Processing and 

Disbursement Center, 14925 Kingsport 

Road, Fort Worth, TX 76155. 

FOR FURTHER INFORMATION CONTACT: M. 

Mitravich, Office of Disaster Assistance, 

U.S. Small Business Administration, 

409 3rd Street, SW., Suite 6050, 

Washington, DC 20416. 

SUPPLEMENTARY INFORMATION: Notice is 

hereby given that as a result of the 

President’s major disaster declaration on 

07/31/2008, applications for disaster 

loans may be filed at the address listed 

above or other locally announced 

locations. 

The following areas have been 

determined to be adversely affected by 

the disaster: 

Primary Counties (Physical Damage and 

Economic Injury Loans): 

Cameron, Hidalgo, Willacy. 

Contiguous Counties (Economic Injury 

Loans Only): 

Texas: Brooks, Starr, Kenedy. 

The Interest Rates are: 

Percent 

For Physical Damage: 

Homeowners With Credit Available Elsewhere ...................... 5.375 

Homeowners Without Credit 

Available Elsewhere .............. 2.687 

Businesses With Credit Available Elsewhere ...................... 8.000 

Other (Including Non-Profit Organizations) With Credit 

Available Elsewhere .............. 5.250 

Businesses and Non-Profit Organizations Without Credit 

Available Elsewhere .............. 4.000 

For Economic Injury: 

Businesses & Small Agricultural 

Cooperatives Without Credit 

Available Elsewhere .............. 4.000 

The number assigned to this disaster 

for physical damage is 113538 and for 

economic injury is 113540. 

(Catalog of Federal Domestic Assistance 

Numbers 59002 and 59008) 

Herbert L. Mitchell, 

Associate Administrator for Disaster 

Assistance. 

[FR Doc. E8–18443 Filed 8–8–08; 8:45 am] 

BILLING CODE 8025–01–P 

SMALL BUSINESS ADMINISTRATION 

HUBZone Program 

AGENCY: U.S. Small Business 

Administration (SBA). 

ACTION: Notice of methodology for 

measuring the economic impact of the 

HUBZone Program. 

SUMMARY: In June 2008, the Government 

Accountability Office (GAO) issued its 

findings on the U.S. Small Business 

Administration (SBA) Historically 

Underutilized Business Zone 

(HUBZone) Program. One of GAO’s 

findings is that the SBA does not assess 

the Program’s economic impact. The 

GAO noted the importance of this given 

that the HUBZone Program is primarily 

defined by economic factors (household 

income, unemployment rate, and 

poverty rate). 

On June 6, 2008, the SBA responded 

to GAO’s findings, and provided several 

steps to address them. One of these 

steps is to develop a methodology for 

assessing the Program’s economic 

impact. 

This paper outlines the anticipated 

methodology for this assessment. The 

paper will provide a brief description of 

the different methodological options 

currently available for undertaking an 

impact assessment. It will then provide 

a basic description of the HUBZone 

Program. Finally, it will detail the 

specific methodology chosen for 

measuring the Program’s economic 

impact. 

The complexity of assessing the 

Program’s economic impact lies in that 

there are multiple government agencies 

using three relevant procurement 

mechanisms, and five classes of 

HUBZones. In addition, the required 

data for this assessment will be derived 

from four different databases. This 

multiple database feature, as well as 

other documented data issues of the 

HUBZone Program, increases the 

difficulty of correctly identifying the 

assessment’s relevant data elements. 

This methodology assumes that these 

data issues will be addressed. 

This methodology will trace Federal 

contract dollars as they flow to the 


rmajette on PRODPC74 with NOTICES