64370 Federal Register / Vol. 75, No. 201 / Tuesday, October 19, 2010 / Notices 

8 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)(iii). 

4Under Rule 4758, the ‘‘System routing table’’ is 

defined as the proprietary process for determining 

the specific trading venues to which the NASDAQ 

System routes orders and the order in which it 

routes them. The definition reflects the fact that 

NASDAQ, 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 NASDAQ reserves the 

right to maintain a different routing table for 

different routing options and to modify routing 

tables at any time without notice. At present, all 

System routing tables include NASDAQ OMX BX 

(‘‘BX’’), and it is expected that they will be modified 

also to include PSX. Thus, all routed orders have 

the opportunity to route to this venue, with the 

exception of DOT orders routed directly to the 

NYSE or NYSE Amex opening or closing processes 

and directed orders that are directed to route to 

venues other than BX. 

5 15 U.S.C. 78f. 

6 15 U.S.C. 78f(b)(5). 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR– 

NYSEAmex–2010–97 and should be 

submitted on or before November 9, 

2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.8

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–26109 Filed 10–18–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63083; File No. SR– 

NASDAQ–2010–127] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Modify 

NASDAQ’s Order Routing Rule 

October 13, 2010. 

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

Securities Exchange Act of 1934 (the 

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

notice is hereby given that on October 

1, 2010, The NASDAQ Stock Market 

LLC (‘‘NASDAQ’’ or the ‘‘Exchange’’) 

filed with the Securities and Exchange 

Commission (the ‘‘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 this proposed 

rule change to amend Rule 4758 to 

modify the SAVE routing option to 

reflect the expected launch of NASDAQ 

OMX PSX (‘‘PSX’’) as a new venue for 

trading NMS stocks on October 8, 2010. 

NASDAQ proposes to implement the 

proposed rule change on October 8, 

2010, or, if the Commission does not 

waive the 30-day waiting period 

specified in Rule 19b–4(f)(6)(iii),3 on a 

date that is 30 days after the date of this 

filing. The text of the proposed rule 

change is available at http:// 

nasdaq.cchwallstreet.com/, at the 

Exchange’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, 

NASDAQ included statements 

concerning the purpose of, and basis for, 

the proposed rule change. 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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

NASDAQ is amending Rule 4758, 

which describes its order routing 

processes, to modify the existing SAVE 

routing option. Under the SAVE routing 

option, a market participant may specify 

that an order will either (i) route to 

NASDAQ OMX BX (‘‘BX’’), check the 

NASDAQ book, and then route to other 

venues on the SAVE System routing 

table, or (ii) check the NASDAQ book 

first and then route to destinations on 

the SAVE System routing table.4 Under 

the second option, the applicable 

routing table includes BX, and as is the 

case with all market destinations, the 

placement of BX on the routing table 

depends on NASDAQ’s ongoing 

assessments of factors such as latency, 

fill rates, reliability, and cost. If shares 

remain un-executed after routing, they 

are posted to the NASDAQ book and do 

not route out again. All routing 

complies with the requirements of Rule 

611 of Regulation NMS. Under Rule 

7018, NASDAQ passes through, without 

modification, applicable BX fees or 

rebates. In the case of BX, this means 

that NASDAQ passes through the 

$0.0001 per share executed credit paid 

by BX to market participants when 

accessing liquidity. Thus, the routing 

strategy provides market participants 

with the option of routing to a venue 

with a negative execution cost before 

accessing liquidity on NASDAQ and 

other venues. Market participants that 

wish to access NASDAQ before routing 

to BX may also use the SAVE strategy, 

and will receive the same pricing as 

those that opt to route to BX first, 

subject to the fact that they are likely to 

have more shares executed on 

NASDAQ, at a higher cost, than those 

that use SAVE to route to BX first. 

NASDAQ is amending the SAVE 

strategy to provide that in circumstances 

where a market participants [sic] opts to 

route to BX before checking the 

NASDAQ book, the order will also route 

to PSX after BX but before checking 

NASDAQ. PSX will be charging $0.0013 

per share executed to access liquidity, a 

higher rate than BX, but half the fee 

charged by NASDAQ itself to access 

liquidity. Moreover, NASDAQ recently 

amended Rule 7018 to provide that 

orders routed to PSX using the SAVE 

strategy will receive a pass-through of 

applicable charges. Accordingly, 

NASDAQ believes that it is appropriate 

to amend the strategy, to give market 

participants the option of routing to 

these two low cost venues before 

accessing NASDAQ. As is currently the 

case, however, members will also have 

option of checking NASDAQ first using 

the strategy, in which case they will still 

receive pass through pricing if their 

orders are subsequently routed to BX or 

PSX. 

2. Statutory Basis 

NASDAQ believes that the proposed 

rule change is consistent with the 

provisions of Section 6 of the Act,5 in 

general, and with Sections 6(b)(5) of the 

Act,6 in particular, in that the proposal 

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 

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. The proposed change to 

modify the SAVE routing will provide 

market participants with greater 

flexibility in routing orders to BX and 

PSX, as low cost trading venues. 

mstockstill on DSKH9S0YB1PROD with NOTICES

Federal Register / Vol. 75, No. 201 / Tuesday, October 19, 2010 / Notices 64371 

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

8 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. 

9 17 CFR 240.19b–4(f)(6). 

10For 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). 

11The text of the proposed rule change is 

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

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

12 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Securities Exchange Act Release No. 62847 

(September 3, 2010), 75 FR 55383 (‘‘Notice’’). 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange 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, as amended. 

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 

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 7 and Rule 19b– 

4(f)(6) thereunder.8

A proposed rule change filed 

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

Act 9 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 because it currently has 

the technological changes ready to 

support the proposed rule change, and 

believes that the benefits of providing 

members with an additional option for 

routing to a new low cost trading venue 

should not be delayed. The Commission 

believes that waiving the 30-day 

operative delay 10 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. If the 

Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

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–2010–127 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–2010–127. 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,11 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–NASDAQ–2010–127 and 

should be submitted on or before 

November 9, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–26245 Filed 10–18–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63096; File No. SR–CBOE– 

2010–077] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Order Granting Approval 

of Proposed Rule Change To List 

Series With Up to 12 Expiration Months 

for Broad-Based Security Index 

Options Upon Which the Exchange 

Calculates a Volatility Index 

October 13, 2010. 

I. Introduction 

On August 24, 2010, the Chicago 

Board Options Exchange, Incorporated 

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

Securities and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’) 1 and Rule 19b–4 

thereunder,2 a proposed rule change to 

allow the Exchange to list series with up 

to 12 expiration months for options that 

overlie broad-based security indexes for 

which options are used by the Exchange 

to calculate a volatility index. On 

September 2, 2010, the Exchange filed 

Amendment No. 1, which replaced the 

original filing in its entirety. The 

proposed rule change, as amended, was 

published for comment in the Federal 

Register on September 10, 2010.3 The 

Commission received no comment 

letters on the proposal. This order 

approves the proposed rule change. 

II. Description of the Proposal 

CBOE has proposed to amend Rule 

24.9(a)(2), Terms of Index Options, to 

allow the Exchange to list series with up 

to 12 expiration months for broad-based 

security index options upon which the 

Exchange calculates a volatility index. 

Currently, Rule 24.9(a)(2) permits the 

Exchange to list series with only seven 

mstockstill on DSKH9S0YB1PROD with NOTICES