Federal Register / Vol. 75, No. 193 / Wednesday, October 6, 2010 / Notices 61797 

13 15 U.S.C. 78s(b)(3)(A). 

14 17 CFR 240.19b–4(f)(6). 

15The text of the proposed rule change is 

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

www.sec.gov/rules/sro.shtml. 

16 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

better than market makers, the Exchange 

does not believe it is necessary to 

impose the Rule’s restrictions on the 

entry of broker-dealer orders. The 

Exchange believes that the elimination 

of these restrictions will permit entities 

other than market makers to enter orders 

on both sides of the market more freely, 

resulting in more orders on the ISE book 

and therefore increase liquidity on the 

ISE market, all to the benefit of 

investors. 

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 

Because the foregoing proposed rule 

change does not significantly affect the 

protection of investors or the public 

interest, does not impose any significant 

burden on competition, and, by its 

terms, does not 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) 13 of the Act and Rule 19b– 

4(f)(6) 14 thereunder. The Exchange 

provided the Commission with 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 the proposed 

rule change. 

At any time within 60 days of the 

filing of the 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–ISE–2010–95 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–2010–95. 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,15 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, 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–ISE–2010–95 and should be 

submitted on or before October 27, 

2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–25068 Filed 10–5–10; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63022; File No. SR– 

NASDAQ–2010–116)] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

a Proposed Rule Change To Modify 

Nasdaq’s Order Routing Rule 

September 30, 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 27, 2010, The NASDAQ 

Stock Market LLC (‘‘Nasdaq’’) filed with 

the Securities and Exchange 

Commission (‘‘SEC’’ or ‘‘Commission’’) 

the proposed rule change as described 

in Items I and II, which Items have been 

prepared by Nasdaq. 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 is filing a proposal for the 

NASDAQ Options Market (‘‘NOM’’ or 

‘‘Exchange’’) to modify Chapter VI, 

Section 11 of the NOM rules, to add a 

new order routing option and to assign 

a name to the existing routing option. 

The text of the proposed rule change 

is available from Nasdaq’s Web site 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 

mstockstill on DSKH9S0YB1PROD with NOTICES

61798 Federal Register / Vol. 75, No. 193 / Wednesday, October 6, 2010 / Notices 

3Nasdaq has previously defined the term ‘‘System 

routing table’’ in connection with the Nasdaq Stock 

Market. See Securities Exchange Act Release No. 

34–61460 (February 1, 2010), 75 FR 6077 (February 

5, 2010) (SR–NASDAQ–2010–018). 

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 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 satisfied this requirement. 

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 Section 11, Order 

Routing, of Chapter VI of the NOM rules 

which describes NOM’s order routing 

processes, to add a new routing option, 

and to assign the name ‘‘SEEK’’ to the 

existing routing option. Currently SEEK, 

the only routing option available 

through NOM, is described in Section 

11(a) of Chapter VI. NOM is now 

proposing to replace this existing 

language with text describing new, 

separately named routing options, 

including SEEK. The proposed change 

to introduce the SRCH routing option 

will provide market participants 

additional tools with which to manage 

their order flow. Routing options may be 

combined with all available order types 

and times-in-force, with the exception 

of order types and times-in-force whose 

terms are inconsistent with the terms of 

a particular routing option. The routing 

options are described below. 

Section 11(a)(1)(A) provides a 

description of SEEK which is the 

Exchange’s existing, unnamed order 

routing option. Section 11(a)(1)(A) also 

specifically assigns the name SEEK to 

this existing routing option. Pursuant to 

this option, an order first checks the 

System for available contracts for 

execution. After checking the System for 

available contracts, orders are sent to 

other available market centers for 

potential execution, per the entering 

firm’s instructions. When checking the 

book, the System seeks to execute at the 

price at which it would send the order 

to a destination market center. If 

contracts remain un-executed after 

routing, they are posted on the book. 

Once on the book, should the order 

subsequently be locked or crossed by 

another market center, the System does 

not route the order to the locking or 

crossing market center. The SEEK 

option is valuable to Participants 

interested in executing as many 

contracts as possible upon submission 

of the order to the Exchange. After 

executing on the Exchange and routing 

to other destinations, any remaining 

unfilled portion will rest passively on 

the Exchange book regardless of 

whether the order is subsequently 

locked or crossed by another options 

exchange. This provides participants 

with the ability to aggressively seek 

available liquidity in the marketplace 

while also allowing the participant to 

set the new market price (once available 

liquidity has been exhausted in the 

marketplace) and avoid re-routing the 

order, potentially reducing the fees paid 

by the participant. 

The SRCH routing option operates in 

the same manner as SEEK except that if 

the order is not completely executed 

after routing and is then posted on the 

Exchange book, if another options 

exchange subsequently locks or crosses 

the limit price of the order, it will reroute. Similarly to SEEK, the SRCH 

option is valuable to Participants 

interested in executing as many 

contracts as possible upon submission 

of the order to the Exchange. However, 

there may be times that participants 

wish to execute against any available 

liquidity that may exist in the 

marketplace after the order has been 

posted, regardless of other drawbacks 

associated with re-routing, in which 

case the SRCH routing option better fits 

the participant’s needs. 

Pursuant to Section 11(c) of Chapter 

VI, orders sent by the System pursuant 

to the SEEK and SRCH routing options 

to other markets would not retain time 

priority with respect to other orders in 

the System. If an order routed pursuant 

to SEEK or SRCH is subsequently 

returned, in whole or in part, that order, 

or its remainder, will receive a new time 

stamp reflecting the time of its return to 

the System. 

Nasdaq is also deleting language from 

subsection 11(a) of Chapter VI, which 

describes existing order routing 

processes. This language is no longer 

necessary because it would be 

duplicative of the SEEK rule language. 

Nasdaq is also amending Section 11 to 

include a definition of ‘‘System routing 

table,’’ defined as the proprietary 

process for determining the specific 

trading venues to which NOM routes 

orders and the order in which it routes 

them.3 The definition reflects the fact 

that NOM, like other trading venues, 

maintains different routing tables for 

different routing options and modifies 

them on a regular basis to reflect 

assessments about the destination 

markets. Such assessments consider 

factors such as a destination’s latency, 

fill rates, reliability, and cost. 

Accordingly, the definition specifies 

that NOM reserves the right to maintain 

a different routing table for different 

routing options and to modify routing 

tables at any time without notice. All 

routing complies with Chapter XII of the 

NOM rules, the Options Order 

Protection and Locked and Crossed 

Market Rules. 

Use of the various NOM routing 

options is purely voluntary. Market 

Participants wishing to use a NOM 

routing option must provide the 

Exchange with instructions specifying 

the option they wish to use. If no 

instructions are provided, the Exchange 

will not route on behalf of the 

participant. 

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 believes that the proposed 

change to introduce the new routing 

options will provide market participants 

with greater flexibility and success in 

managing and executing order flow 

while also minimizing trading costs. 

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; 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 6 and Rule 19b– 

4(f)(6) thereunder.7

mstockstill on DSKH9S0YB1PROD with NOTICES

Federal Register / Vol. 75, No. 193 / Wednesday, October 6, 2010 / Notices 61799 

8 17 CFR 240.19b–4(f)(6). 

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). 

10 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3This proposal refers to ‘‘PHLX XL’’ as the 

Exchange’s automated options trading system. In 

May 2009 the Exchange enhanced the system and 

adopted corresponding rules referring to the system 

as ‘‘Phlx XL II.’’ See Securities Exchange Act Release 

No. 59995 (May 28, 2009), 74 FR 26750 (June 3, 

2009) (SR–Phlx–2009–32). The Exchange intends to 

submit a separate technical proposed rule change 

that would change all references to the system from 

‘‘Phlx XL II’’ to ‘‘PHLX XL’’ for branding purposes. 

A proposed rule change filed 

pursuant to Rule 19b–4(f)(6) under the 

Act 8 normally does not become 

operative for 30 days after the date of its 

filing. However, Rule 19b–4(f)(6) 

permits the Commission to designate a 

shorter time if such action is consistent 

with the protection of investors and the 

public interest. Nasdaq requests that the 

Commission waive the 30-day operative 

delay. Nasdaq requests this waiver 

because it currently has the 

technological changes ready to support 

the proposed rule change, and believes 

that the benefits of greater flexibility 

that are expected from the rule change 

should not be delayed. 

The Exchange believes that the rule 

change is designed to provide market 

participants with an additional choice 

when availing themselves of NOM’s 

order routing and execution services. By 

offering an additional routing option, 

Nasdaq hopes to benefit market 

participants and their customers by 

allowing them greater flexibility in their 

efforts to fill orders and minimize 

trading costs. Nasdaq provides these 

services in a highly competitive market 

in which participants may avail 

themselves of a wide variety of routing 

options. In such an environment, system 

enhancements such as the changes 

proposed in this rule filing do not 

burden competition, because they can 

succeed in attracting order flow to NOM 

only if they offer investors higher 

quality and better value than services 

offered by others. Encouraging 

competitors to provide higher quality 

and better value is the essence of a wellfunctioning competitive marketplace. 

The Exchange also believes that 

immediate effectiveness of this 

proposed rule change is especially 

appropriate given that routing through 

NOM is purely optional. Market 

participants have the flexibility to mark 

their orders as not available for routing. 

If there is no benefit to the new routing 

strategy, market participants will simply 

not use it. The Exchange will not apply 

the new order routing strategy to market 

participants’ orders without their 

positive consent. In fact, market 

participants would have to make 

programming changes to adopt the new 

routing strategy and would need to do 

nothing if they chose not to adopt it. 

The Commission believes that 

waiving the 30-day operative delay 9 is 

consistent with the protection of 

investors and the public interest and 

designates the proposal operative upon 

filing. 

At any time within 60 days of the 

filing of the 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–NASDAQ–2010–116 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–NASDAQ–2010–116. 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–NASDAQ– 

2010–116 and should be submitted on 

or before October 27, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–25107 Filed 10–5–10; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63024; File No. SR–Phlx– 

2010–134] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by NASDAQ 

OMX PHLX, LLC Relating to Exchange 

Disseminated Quotations 

September 30, 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 

September 29, 2010, NASDAQ OMX 

PHLX, Inc. (‘‘Phlx’’ or the ‘‘Exchange’’) 

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 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 Rules 1017, Openings in 

Options, and 1082, Firm Quotations, to 

reflect a system change to modify the 

manner in which the PHLX XL®

automated options trading system 3

disseminates quotations when (i) there 

is an opening imbalance in a particular 

series, and (ii) there is a Quote Exhaust 

(as described below) or a Market 

mstockstill on DSKH9S0YB1PROD with NOTICES