63876 Federal Register / Vol. 75, No. 200 / Monday, October 18, 2010 / Notices 

decisions on the Fund’s portfolio composition must 

be subject to procedures designed to prevent the use 

and dissemination of material non-public 

information regarding the portfolio. 

14See NYSE Arca Equities Rule 8.600(d)(1)(B). 

15See NYSE Arca Equities Rule 8.600(d)(2)(D). 

Trading in the Shares may also be halted because 

of market conditions or for reasons that, in the view 

of the Exchange, make trading in the Shares 

inadvisable. These may include: (1) The extent to 

which trading is not occurring in the securities 

comprising the Disclosed Portfolio and/or the 

financial instruments of the Fund; or (2) whether 

other unusual conditions or circumstances 

detrimental to the maintenance of a fair and orderly 

market are present. 

16See NYSE Arca Equities Rule 8.600(d)(2)(B)(ii). 

17 17 CFR 240.10A–3. 

18 15 U.S.C. 78s(b)(2). 

19 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3An Options Floor Broker (‘‘Floor Broker’’) is 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. An 

Options Floor Broker shall not accept an order from 

any other source unless he is the nominee of a 

member organization qualified to transact business 

Commission also notes that the 

Exchange will obtain a representation 

from the Fund that the NAV per Share 

will be calculated daily and that the 

NAV and the Disclosed Portfolio will be 

made available to all market 

participants at the same time.14

Additionally, if it becomes aware that 

the NAV or the Disclosed Portfolio is 

not disseminated to all market 

participants at the same time, the 

Exchange will halt trading in the Shares 

until such information is available to all 

market participants. Further, if the PIV 

is not being disseminated as required, 

the Exchange may halt trading during 

the day in which the interruption 

occurs; if the interruption persists past 

the day in which it occurred, the 

Exchange will halt trading no later than 

the beginning of the trading day 

following the interruption.15 Finally, 

the Commission notes that the 

Reporting Authority that provides the 

Disclosed Portfolio must implement and 

maintain, or be subject to, procedures 

designed to prevent the use and 

dissemination of material non-public 

information regarding the actual 

components of the portfolio.16

The Exchange has represented that 

the Shares are equity securities subject 

to the Exchange’s rules governing the 

trading of equity securities. In support 

of this proposal, the Exchange has made 

representations, including: 

(1) The Shares will conform to the 

initial and continued listing criteria 

under NYSE Arca Equities Rule 8.600. 

(2) The Exchange’s surveillance 

procedures are adequate to properly 

monitor Exchange trading of the Shares 

in all trading sessions and to deter and 

detect violations of Exchange rules and 

applicable federal securities laws. 

(3) Prior to the commencement of 

trading, the Exchange will inform its 

ETP Holders in an Information Bulletin 

of the special characteristics and risks 

associated with trading the Shares. 

Specifically, the Information Bulletin 

will discuss the following: (a) The 

procedures for purchases and 

redemptions of Shares and that Shares 

are not individually redeemable; (b) 

NYSE Arca Equities Rule 9.2(a), which 

imposes a duty of due diligence on its 

ETP Holders to learn the essential facts 

relating to every customer prior to 

trading the Shares; (c) the risks involved 

in trading the Shares during the 

Opening and Late Trading Sessions 

when an updated PIV will not be 

calculated or publicly disseminated; (d) 

how information regarding the PIV is 

disseminated; (e) the requirement that 

ETP Holders deliver a prospectus to 

investors purchasing newly issued 

Shares prior to or concurrently with the 

confirmation of a transaction; and (f) 

trading information. 

(4) The Fund will be in compliance 

with Rule 10A–3 under the Act.17

(5) Except for Underlying ETFs that 

may hold non-U.S. issues, the Fund will 

not otherwise invest in non-U.S. issues. 

In addition, the Commission notes 

that it has not received any comments 

regarding the proposed rule change. 

For the forgoing reasons, the 

Commission believes that the 

Exchange’s proposal to list and trade the 

Shares is consistent with the Act. This 

order is based on the Exchange’s 

representations. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,18 that the 

proposed rule change (SR–NYSEArca– 

2010–79) be, and it hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–26132 Filed 10–15–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63071; File No. SR–Phlx– 

2010–139] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX, Inc.; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to 

Floor Broker Responsibilities 

October 8, 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 

5, 2010, NASDAQ OMX PHLX, Inc. 

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

Securities and Exchange Commission 

(the ‘‘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 Rule 1063, Responsibility of 

Floor Brokers, and Option Floor 

Procedure Advice (‘‘OFPA’’) C–2, 

Options Floor Broker Management 

System: to: (i) Require floor brokers to 

enter specific identifying information on 

their orders; and (ii) amend the current 

language applicable to the entry of 

clearing information by floor brokers. 

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 those 

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 parts 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 require floor brokers to 

enter certain identifying information on 

their orders to enhance the Exchange’s 

audit trail to provide more specificity in 

identifying a market participant’s 

executing order. The Exchange is 

proposing to require floor brokers 3 to 

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Federal Register / Vol. 75, No. 200 / Monday, October 18, 2010 / Notices 63877 

with the public in which event he may accept 

orders from public customers of the organization. 

See Exchange Rule 1060. 

4This is an identifying letter that is assigned by 

the Exchange that follows the account number and 

identifies a Registered Options Trader (‘‘ROT’’). A 

Registered Options Trader may have more than one 

alpha/numeric. 

5The Options Floor Broker Management System 

(‘‘FBMS’’) is a component of the Exchange’s system 

designed to enable Floor Brokers and/or their 

employees to enter, route and report transactions 

stemming from options orders received on the 

Exchange. The FBMS 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. 

6See Option Floor Procedure Advice F–1 titled 

Use of Identification Letters and Numbers. 

Specialists and ROTs are also required to comply 

with F–1 in addition to Floor Brokers. 

7A ROT includes a Streaming Quote Trader 

(‘‘SQT’’), a Remote Streaming Quote Trader 

(‘‘RSQT’’) and a Non-SQT, which by definition is 

neither a SQT or a RSQT. See Exchange Rule 1014 

(b)(i) and (ii). 

8The required information complies with the 

Consolidated Options Audit Trail System 

(‘‘COATS’’) requirements. COATS effectively 

enhances intermarket options surveillance by 

enabling the options exchanges to reconstruct the 

market promptly to effectively surveil certain rules. 

Through its participation in the Intermarket 

Surveillance Group (‘‘ISG’’), the Exchange shares 

information and coordinates inquiries and 

investigations with other exchanges designed to 

address potential intermarket manipulation and 

trading abuses. The Exchange’s participation in ISG 

helps it to satisfy the Exchange Act requirement 

that it have coordinated surveillance with markets 

on which security futures are traded and markets 

on which any security underlying security futures 

are traded to detect manipulation and insider 

trading. ISG is an industry organization formed in 

1983 to coordinate intermarket surveillance among 

the SROs by cooperatively sharing regulatory 

information pursuant to a written agreement 

between the parties. The goal of the ISG’s 

information sharing is to coordinate regulatory 

efforts to address potential intermarket trading 

abuses and manipulations. 

9This COATS requirement is not to be confused 

with the requirement to submit the clearing 

information of the Broker-Dealer that submitted the 

order. 

10Such clearing information includes the account 

number(s) of each contra-side participant to the 

floor broker’s trade in the crowd and the number 

of contracts bought or sold. This information would 

be immediately reported to the clearing firm of each 

crowd participant involved in the trade. 

11See Chicago Board Options Exchange, Inc. 

(‘‘CBOE’’) Rule 6.24(a)(2) which contains similar 

language. 

12An ‘‘upstairs firm’’ is a broker-dealer, not 

located on the trading floor that submits an order 

to a floor broker for execution. The floor brokers 

typically are not affiliated with the ‘‘upstairs firms’’. 

13Prime Brokerage is a mechanism for centralized 

securities clearing at one facility which allows 

multiple execution arrangements. A customer who 

has a Prime Brokerage account may have accounts 

with multiple firms used for executing trades. 

enter certain alpha/numeric identifying 

information in addition to their own 

account number. 

Currently, floor brokers enter their 

own alpha/numeric identification 

information,4 assigned by the Exchange, 

on the Options Floor Broker 

Management System,5 for each order 

they receive and represent in the trading 

crowd.6 Similarly, Advice F–1 requires 

ROTs to enter their complete alpha/ 

numeric identification assigned by the 

Exchange on the FBMS for each order 

they receive in the trading crowd. The 

Exchange is proposing to amend 

Exchange Rule 1063 and Option Floor 

Procedure Advice C–2 to require Floor 

Brokers to enter alpha/numeric 

identification for all orders entered on 

behalf of ROTs,7 not just for orders they 

receive and represent themselves in a 

trading crowd. 

Additionally, the Exchange is 

proposing to amend the timeframe 

within which floor brokers enter certain 

clearing information into the FBMS. 

Currently, a floor broker is required to 

contemporaneously upon receipt of an 

order and prior to the representation of 

such an order record the following 

specific information with respect to 

orders represented by a floor broker into 

FBMS: (i) The order type (i.e., customer, 

firm, broker-dealer, professional); (ii) 

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

or cancel; (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’’).8

In addition, floor brokers or their 

employees are required to enter clearing 

information onto the FBMS no later 

than five minutes after the execution of 

the trade. The clearing information, 

which is the contra-side clearing 

information, is not required to be 

entered pursuant to COATS.9 Rather, 

this information facilitates the 

identification of the trade for clearing.10

The Exchange proposes to amend the 

current language to state any additional 

information with respect to the order 

shall be inputted into the Exchange’s 

systems contemporaneously upon 

receipt, which may occur after the 

representation and execution of the 

order.11

The Exchange believes this 

amendment to the time, from a five 

minute timer to a ‘‘upon receipt’’ 

requirement, is necessary to allow floor 

brokers to enter the requisite clearing 

information. Currently, certain types of 

trades that are handled in a trading 

crowd are being entered upon receipt 

and prior to the expiration of the five 

minute timer without incident. Other 

types of transactions which are received 

by a floor broker from an upstairs firm 12

which may involve Prime Brokerage 13

relationships may require additional 

time, beyond five minutes, because the 

clearing information may not be readily 

ascertainable. Likewise, complex orders 

with multiple legs can take longer than 

five minutes to input into the FBMS 

system simply because of the quantity of 

information that is required to be 

entered. The Exchange believes that 

upon receipt means as soon as that 

clearing information becomes available 

to a floor broker. That timeframe must 

be reasonable and will be monitored by 

the Exchange’s surveillance staff to 

ensure such timing is not unreasonable. 

The Exchange believes that this 

modification to the rules will prevent a 

large number of change orders from 

floor brokers who are concerned with 

meeting the current five minute timer 

and enter information which is later 

found out to be inaccurate and a change 

order is required. With the more 

reasonable timeframe, a floor broker 

may properly enter the information the 

first time. Also, the additional flexibility 

will allow floor brokers with complex 

orders to comply with Exchange rules. 

Today, even if a floor broker begins to 

enter the clearing information for a 

complex order immediately after the 

trade was executed, they may run afoul 

of the five minute timer simply because 

the information is too large in volume 

to physically input within five minutes. 

This amendment would alleviate these 

concerns. The Exchange does not 

anticipate a change in behavior for the 

remainder of the floor brokers who are 

currently able to enter the clearing 

information promptly upon execution 

and do so today. 

The Exchange previously amended its 

rules to add the five minute timer 

because once the clearing information is 

reported crowd participants involved in 

the trade would receive a position 

update enabling them to know their 

respective positions on a real-time basis 

and to make appropriate informed and 

timely hedging transactional decisions. 

The Exchange believes that this 

language will continue to enable to 

allow Specialists and ROTs, in 

particular, to receive such position 

updates going forward. Additionally, 

FBMS technology provided to floor 

brokers offers them an efficient means to 

enter clearing information for trade 

participants contemporaneously upon 

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63878 Federal Register / Vol. 75, No. 200 / Monday, October 18, 2010 / Notices 

14The Exchange’s minor rule plan consists of 

options floor procedure advices (‘‘OFPAs’’ or 

‘‘Advices’’) with preset fines, pursuant to Rule 19d– 

1(c) under the Act. 17 CFR 240.19d–1(c). Most 

OFPAs have corresponding options rules. 

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

16 15 U.S.C. 78f(b)(5). 

17 15 U.S.C. 78s(b)(3)(A). 

18 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires the self-regulatory organization 

to submit to 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. 

19 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

receipt. This technology was not 

previously available. 

The Exchange proposes this 

amendment to both Exchange Rule 1063 

as well as OFPA C–2, which is part of 

the minor rule plan.14

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act 15 in general, and furthers the 

objectives of Section 6(b)(5) of the Act 16

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, by 

requiring a floor broker to enter more 

specific information to identify trades. 

This proposal would enhance the 

Exchange’s audit trail. 

Further, the Exchange believes that 

amending the language concerning 

clearing information related to the 

contra-side of the trade to require the 

information to be entered into FBMS 

contemporaneously upon receipt on the 

Exchange is consistent with the 

language of other exchanges and still 

allows for the timely entry of 

information for clearing purposes. 

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: (i) Does not significantly affect 

the protection of investors or the public 

interest; (ii) does not impose any 

significant burden on competition; and 

(iii) 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, 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 17 and Rule 19b– 

4(f)(6) thereunder.18

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–Phlx–2010–139 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–Phlx–2010–139. 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 Number SR–Phlx– 

2010–139 and should be submitted on 

or before November 8, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–26130 Filed 10–15–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63082; File No. SR–Phlx– 

2010–130] 

Self-Regulatory Organizations; SelfRegulatory Organizations; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change by NASDAQ 

OMX PHLX LLC Relating to PIXL Fees 

October 13, 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 LLC (‘‘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 its 

Fee Schedule to add pricing applicable 

to members utilizing the Exchange’s 

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