Federal Register / Vol. 75, No. 23 / Thursday, February 4, 2010 / Notices 5827 

5 15 U.S.C. 78f. 

6 15 U.S.C. 78f(b)(4). 

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

8 17 CFR 19b–4(f)(2). 

9The Commission considers the 60-day period 

within which the Commission may summarily 

abrogate the proposal pursuant to Section 

19(b)(3)(C) of the Act, 15 U.S.C. 78s(b)(3)(C), to 

commence on January 27, 2010, the date ISE filed 

Amendment No. 2 to the proposal. 

10The text of the proposed rule change is 

available on ISE’s Web site at http://www.ise.com, 

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

www.sec.gov, at ISE, and at the Commission’s 

Public Reference Room. 

11 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

book. The Exchange is not currently 

proposing to charge professional 

customers a fee for taking liquidity from 

ISE’s order book. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the objectives of Section 6 of the 

Exchange Act,5 in general, and furthers 

the objectives of Section 6(b)(4),6 in 

particular, in that it is designed to 

provide for the equitable allocation of 

reasonable dues, fees and other charges 

among its members and other persons 

using its facilities. In particular, the 

proposed rule change will help equalize 

competition between market makers, 

proprietary traders and professional 

customers on the Exchange. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The proposed rule change does not 

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 

The Exchange has not solicited, and 

does not intend to solicit, comments on 

this proposed rule change. The 

Exchange has not received any 

unsolicited written comments from 

members or other interested parties. 

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) of 

the Act 7 and Rule 19b–4(f)(2) 8

thereunder. 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.9

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–ISE–2010–06 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–ISE–2010–06. 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,10 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 10:00 am and 3 

p.m. Copies of the filing also will be 

available for inspection and copying at 

the principal office of the ISE. 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–ISE–2010–06 and should be 

submitted on or before February 25, 

2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–2334 Filed 2–3–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–61438; File No. SR–Phlx– 

2010–13] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by NASDAQ 

OMX PHLX, Inc. Relating To Amending 

Rule 1092, Obvious Errors and 

Catastrophic Errors 

January 28, 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 January 

26, 2010, NASDAQ OMX PHLX, Inc. 

(‘‘Phlx’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘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 1092, Obvious Errors 

and Catastrophic Errors, to adopt the 

ability to review transactions on the 

Exchange’s own motion. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://www.nasdaqtrader.com/ 

micro.aspx?id=PHLXRulefilings, 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 


srobinson on DSKHWCL6B1PROD with NOTICES
5828 Federal Register / Vol. 75, No. 23 / Thursday, February 4, 2010 / Notices 

3 In the event a party to a transaction requests that 

the Exchange review a transaction, the Exchange 

officer nonetheless would need to determine, on his 

or her own motion, whether to review the 

transaction. 

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

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

6 15 U.S.C. 78s(b)(3)(A). 

7 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

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

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 of filing 

of the proposed rule change, or such shorter time 

as designated by the Commission. The Exchange 

has satisfied this requirement. 

8See Exchange Act Release No. 60978 (November 

10, 2009), 74 FR 59296 (November 17, 2009) 

(approving SR–CBOE–2009–68). 

9For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

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

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 the proposed rule 

change is to amend Rule 1092 

pertaining to the nullification and 

adjustment of options transactions. 

Specifically, the Exchange proposes to 

adopt a provision which provides that 

in the interest of maintaining a fair and 

orderly market and for the protection of 

investors, the President of the Exchange 

or his/her designee who is an officer 

(collectively ‘‘Exchange officer’’), may, 

on his or her own motion or upon 

request, determine to review any 

transaction occurring on the Exchange 

that is believed to be erroneous.3 A 

transaction reviewed pursuant to this 

provision may be nullified or adjusted 

only if it is determined by the Exchange 

officer that the transaction is an obvious 

error as provided in Rule 1092. A 

transaction would be adjusted or 

nullified in accordance with the 

provision under which it is deemed an 

erroneous transaction. The Exchange 

officer may be assisted by an Options 

Exchange Official in reviewing a 

transaction. 

The Exchange officer shall act 

pursuant to this paragraph as soon as 

possible after receiving notification of 

the transaction, and ordinarily would be 

expected to act on the same day as the 

transaction occurred. However, because 

a transaction under review may have 

occurred near the close of trading or due 

to unusual circumstances, the rule 

provides that the Exchange officer shall 

act no later than 9:30 a.m. (ET) on the 

next trading day following the date of 

the transaction in question. A party 

affected by a determination to nullify or 

adjust a transaction pursuant to this 

provision may appeal such 

determination in accordance with Rule 

1092; however, a determination by an 

Exchange officer not to review a 

transaction, or a determination not to 

nullify or adjust a transaction for which 

a review was requested or conducted, is 

not appealable. The Exchange believes it 

is appropriate to limit review on appeal 

to only those situations in which a 

transaction is actually nullified or 

adjusted. 

This provision is not intended to 

replace a party’s obligation to request a 

review, within the required time periods 

under Rule 1092, of any transaction that 

it believes meets the criteria for an 

obvious error. And, if a transaction is 

reviewed and a determination has been 

rendered pursuant to Rule 1092, no 

additional relief may be granted under 

this new provision. Moreover, the 

Exchange does not anticipate exercising 

this new authority in every situation in 

which a party fails to make a timely 

request for review of this transaction 

pursuant to Rule 1092. The Exchange 

believes this provision should help to 

protect the integrity of its marketplace 

by vesting an Exchange officer with the 

authority to review a transaction that 

may be erroneous, in those situations 

where a party failed to make a timely 

request for a review. 

The Exchange believes that the 

provision would also be useful in 

situations where some parties, but not 

all, to trades around the same time have 

requested a review. Under the rule, 

reviews are currently request-based. 

Under the proposal, in this situation, 

the Exchange would be able to invoke 

this provision to review a series of 

trades, whether or not all parties 

requested it. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act 4 in general, and furthers the 

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

in particular, in that it is 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. The 

Exchange notes that the Exchange 

officer can adjust or nullify a transaction 

under the authority granted by this 

provision only if the transaction meets 

the objective criteria for an obvious 

error under the Exchange rules. 

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: (i) Significantly affect 

the protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; or (iii) become 

operative for 30 days after the date of 

the filing, 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 6 and Rule 19b– 

4(f)(6) thereunder.7

The Exchange has requested that the 

Commission waive the 30-day operative 

delay so that the Exchange may 

promptly implement the proposed rule 

change. The Exchange believes that a 

recent trading situation that resulted in 

divergent outcomes on some other 

options markets could have been 

handled in a more clear and orderly way 

if the new provision had been in place. 

The Commission notes that the 

proposed rule change is substantively 

identical to a previously approved 

proposal from CBOE 8 and thus presents 

no new regulatory issues. The 

Commission believes that, under the 

circumstances, it is appropriate and 

consistent with the protection of 

investors and the public interest to 

waive the 30-day operative delay. 

Therefore, the Commission hereby 

designates the proposed rule change 

operative upon filing.9

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, 


srobinson on DSKHWCL6B1PROD with NOTICES
Federal Register / Vol. 75, No. 23 / Thursday, February 4, 2010 / Notices 5829 

10 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Amendment No. 1. 

4The term ‘‘Options Participant’’ or ‘‘Participant’’ 

means a firm, or organization that is registered with 

the Exchange pursuant to Chapter II of the NOM 

Rules for purposes of participating in options 

trading on NOM as a ‘‘NASDAQ Options Order 

Entry Firm’’ or ‘‘NASDAQ Options Market Maker.’’ 

5See NOM Rules, Chapter VII, Section 2. 

6See NOM Rules, Chapter VII, Section 5(a). 

7See NOM Rules, Chapter VII, Section 2(a). 

8See NOM Rules, Chapter VII, Section 2. 

9See NOM Rules, Chapter VII, Rule 2(c). 

10See NOM Rules, Chapter VII, Section 4(b). 

11See NOM Rules, Chapter VII, Section 3(a). 

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–Phlx–2010–13 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 No. 

SR–Phlx–2010–13. 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 Phlx. 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–Phlx–2010–13 and should be 

submitted on or before February 25, 

2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–2335 Filed 2–3–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–61443; File No. SR– 

NASDAQ–2010–007] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing of Proposed Rule Change, as 

Modified by Amendment No. 1, 

Relating To Elimination of Market 

Maker Requirement for Each Option 

Series 

January 29, 2010. 

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 January 

14, 2009, 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. On January 26, 

2009, the Exchange filed Amendment 

No. 1 to the proposal. The Commission 

is publishing this notice to solicit 

comments on the proposed rule change, 

as amended, from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

NASDAQ is filing a proposal for the 

NASDAQ Options Market (‘‘NOM’’ or 

‘‘Exchange’’) to delete from the NASDAQ 

rulebook Section 5, Minimum 

Participation Requirement for Opening 

Trading of Option Series,3 of Chapter 

IV, Securities Traded on NOM. 

The text of the proposed rule change 

is available from NASDAQ’s website at 

http://nasdaq.cchwallstreet.com, at 

NASDAQ’s principal office, 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 

NASDAQ is proposing the 

elimination of a requirement that at 

least one Options Market Maker be 

registered for trading a particular series 

before it may be opened for trading on 

NOM. 

An Options Market Maker is a 

Participant 4 registered with NASDAQ 

as a Market Maker.5 Market Makers on 

NOM have certain obligations such as 

maintaining two-sided markets and 

participating in transactions that are 

‘‘reasonably calculated to contribute to 

the maintenance of a fair and orderly 

market.’’ 6 To register as a Market Maker, 

a Participant must file a written 

application with NASDAQ Regulation, 

which will consider an applicant’s 

market making ability and other factors 

it deems appropriate in determining 

whether to approve an applicant’s 

registration.7 All Market Makers are 

designated as specialists on NOM for all 

purposes under the Act or rules 

thereunder.8 The NOM Rules place no 

limit on the number of qualifying 

entities that may become Market 

Makers.9 The good standing of a Market 

Maker may be suspended, terminated, 

or withdrawn if the conditions for 

approval cease to be maintained or the 

Market Maker violates any of its 

agreements with NASDAQ or any 

provisions of the NOM Rules.10 A 

Participant that has qualified as a 

Market Maker may register to make 

markets in individual series of 

options.11

Currently Section 5 of Chapter IV of 

the NOM rulebook provides in relevant 

part that after a particular class of 

options has been approved for listing on 


srobinson on DSKHWCL6B1PROD with NOTICES