56150 Federal Register / Vol. 75, No. 178 / Wednesday, September 15, 2010 / Notices 

15 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Options Floor Procedure Advices (‘‘OFPAs’’ or 

‘‘Advices’’) generally correspond to Exchange rules. 

OFPA C–2 is a corresponding Advice to Rule 1063, 

which deals, in part, with the Options Floor Broker 

Management System and is part of the Exchange’s 

minor rule plan (‘‘MRP’’ or ‘‘Minor Rule Plan’’). The 

Exchange’s Minor Rule Plan consists of Advices 

with preset fines, pursuant to Rule 19d–1(c) under 

the Act. 17 CFR 240.19d–1(c). See Securities 

Exchange Act Release No. 50997 (January 7, 2005), 

70 FR 2444 (January 13, 2005) (SR–Phlx–2003–40) 

(approval order establishing Floor Broker 

Management System in OFPA C–2 and Rule 1063). 

4Rule 1080, Commentary .06 states, in relevant 

part: The Options Floor Broker Management System 

is a component of AUTOM designed to enable Floor 

Brokers and/or their employees to enter, route and 

report transactions stemming from options orders 

received on the Exchange. The Options Floor 

Broker Management System also is designed to 

establish an electronic audit trail for options orders 

represented and executed by Floor Brokers on the 

Exchange, such that the audit trial provides an 

accurate, time-sequenced record of electronic and 

other orders, quotations and transactions on the 

Exchange, beginning with the receipt of an order by 

the Exchange, and further documenting the life of 

the order through the process of execution, partial 

execution, or cancellation of that order. Rule 

1080(a) states, in relevant part: AUTOM is the 

Exchange’s electronic order delivery and reporting 

system, which provides for the automatic entry and 

routing of Exchange-listed equity options, index 

options and U.S. dollar-settled foreign currency 

options orders to the Exchange trading floor. 

5U.S. dollar-settled foreign currency options 

traded on the Exchange are also known as World 

Currency Options (‘‘WCO’’) or Foreign Currency 

Options (‘‘FCO’’). 

6Floor Broker is defined in Rule 1060 as: An 

individual who is registered with the Exchange for 

the purpose, while on the Options Floor, of 

accepting and executing options orders received 

from members and member organizations. 

7See Securities Exchange Act Release No. 50997 

(January 7, 2005), 70 FR 2444 (January 13, 2005) 

(SR–Phlx–2003–40) (approval order establishing 

FBMS in Rule 1063 and OFPA C–2, and adding 

definition of FBMS in Commentary .06 to Rule 

1080). 

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–CBOE–2010–078 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–CBOE–2010–078. 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 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 such filing 

also will be available for inspection and 

copying at the principal office of the 

Exchange. 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 No. SR–CBOE– 

2010–078 and should be submitted on 

or before October 6, 2010 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2010–22947 Filed 9–14–10; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62867; File No. SR–Phlx– 

2010–122] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Clarify What 

Information Must Be Entered Into the 

Exchange’s Options Floor Broker 

Management System 

September 8, 2010. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on 

September 2, 2010, NASDAQ OMX 

PHLX LLC (‘‘Phlx’’ 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 is filing with the 

Commission a proposal to amend Phlx 

Rule 1063 (Responsibilities of Floor 

Brokers) and Phlx Options Procedure 

Advice C–2 (Options Floor Broker 

Management System) 3 to clarify what 

information must be entered into the 

Exchange’s Options Floor Broker 

Management System. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://nasdaqomxphlx 

.cchwallstreet.com/ 

NASDAQOMXPHLX/Filings/, at the 

principal office of the Exchange, 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 

Exchange 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. 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 this proposal is to 

amend Phlx Rule 1063 and Options 

Floor Procedure Advice C–2 to clarify 

that information entered into the 

Exchange’s Options Floor Broker 

Management System must include order 

receipt time. 

The Exchange’s Options Floor Broker 

Management System (‘‘FBMS’’) 4 was 

designed to establish an electronic audit 

trail for equity, equity index and U.S. 

dollar-settled foreign currency options 5

orders represented by Floor Brokers 6 on 

the Exchange.7 The Options Floor 

Broker Management System is found in 

Rule 1063(e) and corresponding Advice 

C–2 and states that either a Floor Broker 

or an employee of a Floor Broker has to 

record all options orders represented by 

such Floor Broker onto the electronic 

FBMS (as described in Rule 1080, 


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Federal Register / Vol. 75, No. 178 / Wednesday, September 15, 2010 / Notices 56151 

8FLEX options are flexible exchange-traded 

index, equity, or currency option contracts that 

provide investors the ability to customize basic 

option features including size, expiration date, 

exercise style, and certain exercise prices. FLEX 

options may have expiration dates within five 

years. See Rule 1079. FLEX currency option 

contracts traded on the Exchange are also known as 

FLEX WCO or FLEX FCO contracts. 

9See supra note 3. 

10The OFPA C–2 fine schedule is as follows: 

FINE SCHEDULE (Implemented on a two-year 

calendar basis): 1st Occurrence—$500.00; 2nd 

Occurrence—$1,000.00;—3rd Occurrence— 

$2,000.00; 4th Occurrence and Thereafter— 

Sanction is discretionary with the Business 

Conduct Committee. 

The Exchange does not propose any changes in 

this filing to the Fine Schedule. 

11To ensure conformity of Rule 1063 and Advice 

C–2, which both contain the list of specific 

information, the exchange proposes to insert the 

word ‘‘cross’’ into Advice C–2. 

12The Exchange notes also that Rule 17a–3(a)(7) 

pursuant to the Act states, in relevant part, that 

broker-dealers that transact a business in securities 

through members of a national securities exchange 

shall make and keep current the books and records 

relating to its business including, but not limited to, 

among other things: A memorandum of each 

purchase and sale for the account of the member, 

broker, or dealer showing the price and, to the 

extent feasible, the time of execution; and, in 

addition, where the purchase or sale is with a 

customer other than a broker or dealer, a 

memorandum of each order received, showing the 

time of receipt. 17 CFR 240.17a–3. 

13The Exchange has filed a proposal to make 

unrelated changes to Rule 1063 and OFPA C–2 at 

SR–Phlx–2010–116 that we believe do not impact 

the changes proposed herein. We would update this 

rule change proposal should it become necessary in 

light of SR–Phlx–2010–116. 

14 15 U.S.C. 78f(b). 

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

16 15 U.S.C. 78s(b)(3)(A). 17 17 CFR 240.19b–4(f)(6). In addition, Phlx has 

given 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 on 

which the Exchange filed the proposed rule change. 

See 17 CFR 240.19b–4(f)(6)(iii). 

Commentary .06) contemporaneously 

upon receipt of an order and prior to the 

representation of such an order in the 

trading crowd. 

Rule 1063(e) and OFPA C–2 specify 

what information must be entered into 

FBMS (the ‘‘FBMS information’’). The 

FBMS information currently required to 

be entered includes, among other things, 

the options symbol and the order type 

(i.e., customer, firm, broker-dealer, 

professional), but not the order receipt 

time. Rule 1063(f), as well the second 

paragraph of corresponding OFPA C–2, 

states that Floor Brokers or their 

employees shall enter FBMS 

information for FLEX 8 options into the 

Exchange’s electronic audit trail in the 

same electronic format as the required 

by Rule 1063(e) and OFPA C–2 for 

equity, equity index and U.S. dollarsettled foreign currency options. In that 

per OFPA C–2 the Options Floor Broker 

Management System is part of the 

Exchange’s Minor Rule Plan,9 the 

Advice sets forth a fine schedule for 

failure to enter FBMS information.10

The Exchange notes that the time that 

an order is entered is being captured by 

the system in the audit trail created via 

the FBMS per Rule 1063(e) and OFPA 

C–2, but is not specifically required in 

the rule and Advice as currently 

written. The Exchange is therefore 

proposing to change Rule 1063 and 

OFPA C–2 to require entry of order 

receipt time information into the FBMS, 

thereby making this information 

requirement a part of the Minor Rule 

Plan reflected in OFPA C–2 and 

conforming the Advice and the rule. 

Specifically, the Exchange proposes to 

state in Rule 1063(e)(i) and OFPA C–2 

that Floor Brokers or their employees 

must record order receipt time in 

conjunction with order type in FBMS. 

Proposed Rule 1063(e)(i) and OFPA C– 

2 as amended will each state, in relevant 

part: The following specific information 

with respect to orders represented by a 

Floor Broker shall be recorded by such 

Floor Broker or such Floor Broker’s 

employees: (i) The order type (i.e., 

customer, firm, broker-dealer, 

professional) and order receipt time; (ii) 

the option symbol; (iii) buy, sell, cross 

or cancel; 11 (iv) call, put, complex (i.e., 

spread, straddle), or contingency order 

as described in Rule 1066; (v) number 

of contracts; (vi) limit price or market 

order or, in the case of a complex order, 

net debit or credit, if applicable; (vii) 

whether the transaction is to open or 

close a position; and (viii) The Options 

Clearing Corporation (‘‘OCC’’) clearing 

number of the broker-dealer that 

submitted the order (collectively, the 

‘‘required information’’).12

The Exchange believes that the 

proposal would codify current practice, 

ensure that violations of FBMS in terms 

of failure to enter order receipt time are 

part of the Exchange’s Minor Rule Plan, 

and harmonize Rule 1063(e) and OFPA 

C–2.13

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act 14 in general, and furthers the 

objectives of Section 6(b)(5) of the Act 15

in particular, in that it 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 facilitating 

transactions in securities, and to remove 

impediments to and perfect the 

mechanisms of a free and open market 

and a national market system. In 

particular, the Exchange proposes to 

codify current practice, ensure that 

violations of the Options Floor Broker 

Management System in terms of failure 

to enter order receipt time are part of the 

Exchange’s Minor Rule Plan, and 

harmonize Rule 1063(e) and OFPA C–2. 

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 

Because the foregoing proposed rule 

change does not: (1) Significantly affect 

the protection of investors or the public 

interest; (2) impose any significant 

burden on competition; and (3) 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, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 16 and Rule 

19b–4(f)(6) thereunder.17

At any time within 60 days of the 

filing of such proposed rule change, the 

Commission summarily may 

temporarily suspend 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–2010–122 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 


srobinson on DSKHWCL6B1PROD with NOTICES
56152 Federal Register / Vol. 75, No. 178 / Wednesday, September 15, 2010 / Notices 

18The text of the proposed rule change is 

available on Exchange’s Web site at http:// 

nasdaqtrader.com/micro.aspx?id=PHLXfilings, on 

the Commission’s Web site at http://www.sec.gov, at 

Phlx, and at the Commission’s Public Reference 

Room. 

19 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b-4. 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–Phlx–2010–122. 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,18 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 the 

Exchange. 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– 

2010–122 and should be submitted on 

or before October 6, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2010–22945 Filed 9–14–10; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62874; File No. SR–NYSE– 

2010–59] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing and Order Granting Accelerated 

Approval of a Proposed Rule Change 

To Amend NYSE Rule 452 and Listed 

Company Manual Section 402.08 To 

Eliminate Broker Discretionary Voting 

on Executive Compensation Matters 

September 9, 2010. 

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

Securities Exchange Act of 1934 

(‘‘Exchange Act’’ or ‘‘Act’’) 1 and Rule 

19b-4 thereunder,2 notice is hereby 

given that on August 26, 2010, New 

York Stock Exchange LLC (‘‘NYSE’’ or 

the ‘‘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 NYSE. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons and is 

approving the proposed rule change on 

an accelerated basis. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange is proposing to amend 

NYSE Rule 452, and corresponding 

NYSE Listed Company Manual Section 

402.08, to prohibit member 

organizations from voting uninstructed 

shares if the matter voted on relates to 

executive compensation, in accordance 

with the provisions of Section 957 of the 

Dodd-Frank Wall Street Reform and 

Consumer Protection Act (the ‘‘DoddFrank Act’’), which was signed by the 

President on July 21, 2010. 

The text of the proposed rule change 

is available at http://www.nyse.com, at 

the Exchange’s principal office, 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 changes. 

The text of these statements may be 

examined at the places specified in Item 

III below and is set forth in Sections A, 

B and C below. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange is proposing to amend 

NYSE Rule 452, titled Giving Proxies by 

Member Organizations, and 

corresponding NYSE Listed Company 

Manual Section 402.08, to prohibit 

member organizations from voting 

uninstructed shares if the matter voted 

on relates to executive compensation, in 

accordance with the provisions of 

Section 957 of the Dodd-Frank Act, 

which was signed by the President on 

July 21, 2010. Because Section 957 of 

the Dodd-Frank Act does not provide for 

a transition phase, the Exchange is 

proposing to adopt the proposed rule 

changes pursuant to Section 19(b) of the 

Act to comply with Section 957 of the 

Dodd-Frank Act and is requesting that 

the Commission approve the proposal 

on an accelerated basis. We are also 

proposing to add the words ‘‘or 

authorize’’ in certain places throughout 

the rule to clarify that the rule includes 

not only the giving of a proxy but also 

the authorization of such proxy. 

Current Requirements of NYSE Rule 452 

Under current NYSE and Commission 

proxy rules, brokers must deliver proxy 

materials to beneficial owners and 

request voting instructions in return. If 

voting instructions have not been 

received by the tenth day preceding the 

meeting date, Rule 452 provides that a 

broker may vote on certain matters 

when the broker has no knowledge of 

any contest as to the action to be taken 

at the meeting and provided such action 

is adequately disclosed to stockholders, 

and does not include authorization for 

a merger, consolidation or any matter 

which may affect substantially the rights 

or privileges of such stock. In addition, 

the Rule currently identifies 20 matters 

with respect to which brokers may not 

vote without instructions from 

beneficial owners. 

Enactment of the Dodd-Frank Wall 

Street Reform and Consumer Protection 

Act 

Prior to the July 21, 2010 enactment 

of the Dodd-Frank Act, under Rule 452 

and the Exchange’s prior 

interpretations, member organizations 

were permitted to cast votes on some 

matters, including some executive 

compensation proposals, without 

specific instructions from beneficial 

owners of the stock. However, the DoddVerDate Mar<15>2010 18:57 Sep 14, 2010 Jkt 220001 PO 00000 Frm 00102 Fmt 4703 Sfmt 4703 E:\FR\FM\15SEN1.SGM 15SEN1

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