59696 Federal Register / Vol. 73, No. 197 / Thursday, October 9, 2008 / Notices 

6The proposed order entry port fee is different 

than the ‘‘SQF Port Fee and Corresponding Credit’’ 

that appears on Appendix A of the Exchange’s fee 

schedule. ‘‘SQF’’ stands for specialized quote feed 

and is a proprietary quoting system that allows 

specialists, streaming quote traders and remote 

streaming quote traders to connect and send quotes 

into Phlx XL, bypassing the Exchange’s Auto-Quote 

System. See Exchange Rule 1080, Commentary 

.01(b). Thus, the proposed order entry port fee 

would be assessed in connection with sending 

orders to the Exchange, while the SQF port fee is 

assessed in connection with sending quotes to the 

Exchange. 

7For purposes of this proposal, an order entry 

mnemonic would be considered active if a member 

organization sends at least one order to the 

Exchange using that order entry mnemonic during 

the applicable billing month. 

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

9 15 U.S.C. 78f(b)(4). 

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

11 17 CFR 240.19b–4(f)(2). 

12 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

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. The 

Exchange 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 

The purpose of adopting the proposed 

order entry port fee is to establish a 

connectivity fee in connection with 

routing orders to the Exchange. Member 

organizations access the Exchange’s 

network through these order entry ports. 

Currently, member organizations do not 

pay for this service.6 The Exchange 

believes that it is appropriate for 

members to pay a uniform monthly fee 

to support the infrastructure associated 

with market access. 

The $250 per month order entry port 

fee would be assessed per member 

organization order entry mnemonic. The 

$250 per month order entry port fee 

would be assessed on any order entry 

mnemonic that was active during that 

billing month.7

The proposed monthly $250 order 

entry port fee is scheduled to be 

implemented beginning October 1, 

2008. 

2. Statutory Basis 

The Exchange believes that its 

proposal to amend its schedule of fees 

is consistent with Section 6(b) of the 

Act 8 in general, and furthers the 

objectives of Section 6(b)(4) of the Act 9

in particular, in that it is an equitable 

allocation of reasonable fees and other 

charges among Exchange member 

organizations. The Exchange believes 

that the proposed order entry port fee is 

reasonable and should allow member 

organizations to connect to the 

Exchange without being unduly 

financially burdensome. The Exchange 

believes that the proposal is an 

equitable allocation of reasonable fees 

among member organizations because 

the proposed order entry port fee would 

be assessed on those member 

organizations who send orders to the 

Exchange through these external order 

entry ports. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange 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 

No written comments were either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) of the Act 10 and 

paragraph (f)(2) of Rule 19b–4 11

thereunder. 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–Phlx–2008–70 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–Phlx–2008–70. 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 will also be available 

for inspection and copying at the 

principal office of the self-regulatory 

organization. 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–Phlx– 

2008–70 and should be submitted on or 

before October 30, 2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–23940 Filed 10–8–08; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58721; File No. SR– 

NASDAQ–2008–079] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating To 

Order Routing 

October 2, 2008. 

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

Securities Exchange Act of 1934 (the 

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


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Federal Register / Vol. 73, No. 197 / Thursday, October 9, 2008 / Notices 59697 

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

4 17 CFR 240.19b–4(f)(6). 

5See NASDAQ Rule 4758(a)(1)(A)(i) (including 

proposed amendments). 

6See NASDAQ Rule 4758(a)(1)(A)(ii) and (iii). 

Orders that return for posting may, in turn, be 

designated as eligible either for routing again if they 

subsequently become executable (‘‘STGY’’) or 

designated to remain on the NASDAQ book after 

posting (‘‘SCAN’’). 

7 Id. Both SCAN and STGY allow market 

participants to instruct whether the order should 

access all available liquidity or only displayed 

liquidity. 

8See NASDAQ Rule 4751(f)(9). 

9See NASDAQ Rule 4758(a)(1)(A)(i) (including 

proposed amendments). 

10 15 U.S.C. 78f. 

11 15 U.S.C. 78f(b)(5). 

notice is hereby given that on 

September 29, 2008, The NASDAQ 

Stock Market LLC (‘‘NASDAQ’’ or 

‘‘Exchange’’) 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 filed the 

proposed rule change as a ‘‘noncontroversial’’ proposed rule change 

pursuant to Section 19(b)(3)(A) of the 

Act 3 and Rule 19b–4(f)(6) thereunder,4

which renders it 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 require that 

orders routed to the New York Stock 

Exchange LLC (‘‘NYSE’’) or the 

American Stock Exchange LLC 

(‘‘AMEX’’) through NASDAQ’s DOT 

routing strategy check the NASDAQ 

book prior to routing, except in the case 

of orders directed for participation in 

the NYSE or AMEX opening or closing 

processes. NASDAQ proposes to make 

the change operative on October 1, 

2008. The text of the proposed rule 

amendment is as follows, with deletions 

in [brackets] and additions italicized: 

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’’). 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, 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-on-open/close. Notwithstanding 

the foregoing, orders designated for 

participation in the NYSE or AMEX 

opening or closing processes will not 

check the System for available shares 

prior to routing. 

(ii)–(iii) No change. 

(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 

NASDAQ is amending Rule 4758 to 

make its procedures for routing orders 

to NYSE and AMEX more consistent 

with its procedures for routing to other 

trading venues. Currently, a NASDAQ 

member seeking to route orders that are 

eligible for posting on the NYSE or 

AMEX books has the option of 

instructing NASDAQ Execution 

Services, the routing broker for 

NASDAQ, to bypass the NASDAQ book 

altogether and route the order directly to 

the destination exchange. By contrast, 

members seeking to bypass the 

NASDAQ book to reach venues other 

than NYSE and AMEX may do so only 

for the purpose of removing liquidity 

from the other venue through the use of 

‘‘directed orders.’’ As NYSE’s and 

AMEX’s share of trading in U.S. cash 

equities decreases, less volume is being 

routed through this specialized routing 

option. Accordingly, NASDAQ proposes 

to eliminate the functionality that 

allows members to post liquidity on the 

NYSE or AMEX books without first 

checking the NASDAQ book, while 

continuing to allow members to post on 

NYSE or AMEX after checking the 

NASDAQ book, or to route directed 

orders to NYSE or AMEX that remove 

liquidity without first checking the 

NASDAQ book. 

Members seeking to use NASDAQ to 

route to NYSE and AMEX will continue 

to have the following options: (i) Access 

available liquidity on NASDAQ and 

then route for posting at the away 

market; 5 (ii) access available liquidity, 

route to the away market to access 

available liquidity, and then return to 

NASDAQ for posting; 6 (iii) access only 

displayed liquidity on NASDAQ and 

other venues (including NYSE and/or 

AMEX) prior to cancelling or returning 

to NASDAQ for posting; 7 or (iv) route 

directed orders to NYSE or AMEX 

without checking the NASDAQ book, 

but on an immediate-or-cancel (IOC) 

basis only.8 In addition, members 

seeking to route orders to NYSE or 

AMEX for purposes of participating in 

opening or closing processes will 

continue to have the option of bypassing 

the NASDAQ book.9

2. Statutory Basis 

NASDAQ believes the proposed rule 

change is consistent with the provisions 

of Section 6 of the Act,10 in general, and 

with Section 6(b)(5) of the Act,11 in 

particular, in that it is designed to 

prevent fraudulent and manipulative 

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 mechanisms of a free 

and open market and a national market 

system, and, in general, to protect 

investors and the public interest. The 

change will eliminate functionality that 

allows members to post liquidity on the 

NYSE or AMEX books without first 

checking the NASDAQ book, in 

accordance with decreasing use of this 

functionality. Following the change, 

members will continue to have 

numerous options for routing to NYSE 

and AMEX, including the use of 


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59698 Federal Register / Vol. 73, No. 197 / Thursday, October 9, 2008 / Notices 

12 15 U.S.C. 78s(b)(3)(A). 

13 17 CFR 240.19b–4(f)(6). 

14 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires a self-regulatory organization to 

give 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. NASDAQ has complied with this 

requirement. 

15 Id. 

16For purposes only of waiving the 30-day 

operative delay of this proposal, the Commission 

has considered the proposed rule’s impact on 

efficiency, competition, and capital formation. 15 

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

17 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

directed IOC orders that bypass the 

NASDAQ book, and orders that are 

eligible for posting at NYSE or AMEX 

after checking the NASDAQ book. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

NASDAQ does not believe that the 

proposed rule change will impose 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 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change 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, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 12 and Rule 19b– 

4(f)(6) thereunder.13

A proposed rule change filed under 

19b–4(f)(6) normally may not become 

operative prior to 30 days after the date 

of filing.14 However, Rule 19b– 

4(f)(6)(iii) 15 permits the Commission to 

designate a shorter time if such action 

is consistent with the protection of 

investors and the public interest. The 

Exchange has requested that the 

Commission waive the 30-day operative 

delay. The Exchange states that waiver 

of the 30-day operative delay will allow 

NASDAQ to make its processes for 

routing to various exchanges consistent 

at the beginning of October 2008. 

Because the current functionality for 

routing and posting to NYSE and AMEX 

without checking the NASDAQ book 

has a particular fee associated with it, 

elimination of this option will affect the 

calculation of NASDAQ’s bills to 

members, which are prepared on a 

monthly basis. Therefore, making the 

proposed change effective at the 

beginning of the month will promote 

efficiency and clarity in NASDAQ’s 

billing processes. 

The Commission believes that 

waiving the 30-day operative delay is 

consistent with the protection of 

investors and the public interest. The 

Commission hereby grants the 

Exchange’s request and designates the 

proposal as operative beginning on 

October 1, 2008.16

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 

No. SR–NASDAQ–2008–079 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, Station Place, 100 F Street, 

NE., Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NASDAQ–2008–079. 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, 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–2008–079 and should be 

submitted on or before October 30, 

2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–23978 Filed 10–8–08; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58722; File No. SR–NYSE– 

2008–95] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Amend Rule 

104.10 To Extend the Duration of the 

Pilot Program Applicable to 

Conditional Transactions as Defined in 

Rule 104.10(6)(i) in all Securities to the 

Earlier of December 31, 2008 or the 

Approval of SR–NYSE–2008–46 

October 2, 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 

September 30, 2008, New York Stock 

Exchange LLC (‘‘NYSE’’ or ‘‘Exchange’’) 

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 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 

The Exchange proposes to amend 

Exchange Rule 104.10 to extend the 

duration of the pilot program applicable 


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