Federal Register / Vol. 75, No. 208 / Thursday, October 28, 2010 / Notices 66405 

6 15 U.S.C. 78s(b)(1). 

7 15 U.S.C. 78f(b). 

8 15 U.S.C. 78f(b)(5). 

9 15 U.S.C. 78s(b)(3)(A). 

10 17 CFR 240.19b–4(f)(6). In addition, Rule 

19b–4(f)(6)(iii) requires a self-regulatory 

organization to provide 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 of the proposed rule 

change, or such shorter time as designated by the 

Commission. C2 has satisfied this requirement. 

11 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

any way adding new matching 

functionality, it is streamlining the 

wording of Rule 6.12 (in the process, it 

is eliminating certain matching 

‘‘options’’ available under the current 

rule, but C2 has no intention to use a 

matching algorithm other than the three 

set forth in the revised rule). Further, as 

proposed, the new Rule would continue 

to allow for a market turner overlay. The 

Exchange represents that market turner 

priority would only be applicable and 

would only be utilized when the prorata algorithm is in place. This is 

because the market turner overlay gives 

priority to the participant that is first in 

time at an improved price point, 

something that price-time priority 

already accomplishes. 

The filing also proposes to correct two 

mistaken references in the definitions of 

Professional and Voluntary Professional 

in Rule 1.1. Specifically those 

definitions mistakenly reference Rule 

6.13(c)(5) as 6.13(c)(v). 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) 6 and the rules and regulations 

thereunder and, in particular, the 

requirements of Section 6(b) of the Act.7

Specifically, the Exchange believes the 

proposed rule change is consistent with 

the Section 6(b)(5) 8 requirements that 

the rules of an exchange be designed to 

promote just and equitable principles of 

trade, to prevent fraudulent and 

manipulative acts, to remove 

impediments to and to perfect the 

mechanism for a free and open market 

and a national market system, and, in 

general, to protect investors and the 

public interest. Streamlining the C2 

matching rules will assist users seeking 

to better understand the matching 

alternatives available on C2. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

C2 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 

The Exchange neither solicited nor 

received comments on the proposal. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change: (1) Does not significantly affect 

the protection of investors or the public 

interest; (2) does not impose any 

significant burden on competition; and 

(3) by its terms does not become 

operative for 30 days after the date of 

this filing, or such shorter time as the 

Commission may designate if consistent 

with the protection of investors and the 

public interest, the proposed rule 

change has become effective pursuant to 

Section 19(b)(3)(A) of the Act 9 and Rule 

19b–4(f)(6) thereunder.10

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–C2–2010–005 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–C2–2010–005. 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 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–C2– 

2010–005 and should be submitted on 

or before November 18, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–27242 Filed 10–27–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63161; File No. SR–EDGA– 

2010–15] 

Self-Regulatory Organizations; EDGA 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend EDGA Rule 

11.5 

October 22, 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 

20, 2010, the EDGA Exchange, Inc. (the 

‘‘Exchange’’ or the ‘‘EDGA’’) 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 self-regulatory 

organization. The Commission is 

publishing this notice to solicit 


emcdonald on DSK2BSOYB1PROD with NOTICES
66406 Federal Register / Vol. 75, No. 208 / Thursday, October 28, 2010 / Notices 

3As defined in Exchange Rule 1.5(cc). 

4 15 U.S.C. 78f(b)(5). 

5 15 U.S.C. 78k–1(a)(1). 

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

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

or such shorter time as designated by the 

Commission. 

8 17 CFR 240.19b–4(f)(6)(iii). 

9 Id. 

10For the purposes only of waiving the operative 

date of this proposal, the Commission has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

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

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 

EDGA Rule 11.5(a)(2) to provide system 

functionality that will cancel any 

portion of a market order submitted to 

the Exchange that would execute at a 

price that is more than $0.50 or 5 

percent worse than last sale at the time 

the order initially reaches the Exchange, 

whichever is greater. The text of the 

proposed rule change is available on the 

Exchange’s Internet Web site at http:// 

www.directedge.com, 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 

self-regulatory organization 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 self-regulatory organization 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 protect market participants 

from executions at prices that are 

significantly worse than the last sale at 

the time of order entry by providing 

Exchange system functionality that will 

cancel any portion of a market order (as 

defined in Rule 11.5(a)(2)) that would 

execute at a price that is 50 cents or 5 

percentage points worse than the 

consolidated last sale, whichever is 

greater. Any portion of a market order 

that would otherwise execute outside of 

these thresholds will be immediately 

cancelled back to the User.3 The 

Exchange believes that Users who 

submit market orders to the Exchange 

generally intend to receive executions 

for the full size of their orders at or near 

the consolidated last sale and are not 

always aware that there may not be 

enough liquidity at that price to fill the 

entire size of their orders. The Exchange 

believes that the market order 

thresholds proposed in this rule filing 

will help avoid executions of market 

orders at prices that are significantly 

worse than the consolidated last sale 

and avoid potentially creating clearly 

erroneous situations. 

Those Users who intend to trade 

against liquidity at multiple price points 

from the consolidated last sale beyond 

the market order thresholds proposed in 

this rule filing can clearly and 

unambiguously specify that intent by 

submitting a marketable limit order to 

the Exchange. 

2. Statutory Basis 

The statutory basis for the proposed 

rule change is Section 6(b)(5) of the 

Act,4 which requires the rules of an 

exchange 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 proposed rule 

change also is designed to support the 

principles of Section 11A(a)(1) 5 of the 

Act in that it seeks to assure fair 

competition among brokers and dealers 

and among exchange markets. The 

Exchange believes that the proposed 

rule meets these requirements in that it 

seeks to promote transparency for how 

order flow will be handled during a 

trading pause. 

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: (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 6 and Rule 19b– 

4(f)(6) thereunder.7

A proposed rule change filed under 

Rule 19b–4(f)(6) normally may not 

become operative prior to 30 days after 

the date of filing.8 However, Rule 19b– 

4(f)(6) 9 permits the Commission to 

designate a shorter time if such action 

is consistent with the protection of 

investors and the public interest. The 

Exchange has requested that the 

Commission waive the 30-day operative 

delay so that the proposal may become 

operative upon filing. The Commission 

notes (i) the proposal is similar to 

existing thresholds on market orders 

adopted by The NASDAQ Stock Market 

LLC, NASDAQ OMX BX, Inc., BATS 

Exchange, Inc., and NYSE Arca, Inc; (ii) 

it presents no novel issues; and (iii) it 

may provide a benefit to market 

participants. For these reasons, the 

Commission believes it is consistent 

with the protection of investors and the 

public interest to waive the 30-day 

operative delay, and hereby grants such 

waiver.10

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 


emcdonald on DSK2BSOYB1PROD with NOTICES
Federal Register / Vol. 75, No. 208 / Thursday, October 28, 2010 / Notices 66407 

11The text of the proposed rule change is 

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

www.directedge.com, on the Commission’s Web site 

at http://www.sec.gov, at EDGA, and at the 

Commission’s Public Reference Room. 

12 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4Facilitation Crosses are governed by Rule 

6.47(b), and are not affected by this proposal. 

Number SR–EDGA–2010–15 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–EDGA–2010–15. 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 website (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 website 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–EDGA– 

2010–15 and should be submitted on or 

before November 18, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–27243 Filed 10–27–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63166; File No. SR– 

NYSEArca–2010–90] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing of Proposed 

Rule Change To Amend Rule 6.47 To 

Describe New Procedures for 

Executing a Cross Transaction 

October 22, 2010. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on October 

21, 2010, NYSE Arca, Inc. (the 

‘‘Exchange’’ or ‘‘NYSE Arca’’) 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 self-regulatory 

organization. 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 

Rule 6.47 to describe new procedures 

for executing a cross transaction. The 

text of the proposed rule change is 

available at the Exchange, the 

Commission’s Public Reference Room, 

and http://www.nyse.com. 

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 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 

NYSE Arca proposes to modify Rule 

6.47(a) to describe new procedures for 

Floor Brokers wishing to execute a NonFacilitation cross transaction.4

Currently, after requesting a market, 

Floor Brokers are required to disclose 

the terms of a cross, after which Market 

Makers are allowed to revise their bids 

and offers to block the cross. 

NYSE Arca proposes that Market 

Makers, after being informed of a 

potential cross, should provide their 

best bid and best offer, but not be 

allowed to step ahead of subsequently 

disclosed trading interest. The Exchange 

intends for Market Makers to make 

markets and not prevent better priced 

trading interests from interacting with 

each other. 

The proposed rule change would 

allow a Floor Broker to request, after 

revealing the size of the orders, a final 

quote for a cross from the Trading 

Crowd, and then to cross above the 

highest bid, or below the lowest offer, 

and, if not on a price provided by the 

Crowd, to execute the cross in its 

entirety. If the cross were to take place 

on the price provided by the Crowd, the 

Floor Broker would be obligated to trade 

with that interest prior to crossing the 

orders. The cross would be required to 

be within the National Best Bid/Offer, 

and would also be obligated to satisfy 

any bids or offers in the Consolidated 

Book equal to or better than the crossing 

price. 

For example, if the prices of the 

orders to be crossed allowed for a range 

of possible crossing prices, and the 

Trading Crowd provided a final quote 

that was two or more Minimum Price 

Variations (‘‘MPV’’) wide, the Floor 

Broker could bid above the Trading 

Crowd’s bid and consummate the cross 

without trading on a final quote price. 

If, alternatively, the final quote was 

only one MPV wide, (i.e., 3.10 bid for 

20 contracts at 3.20 offer for 50 

contracts) the Floor Broker could not 

meet the obligation to the orders 

without trading on a final quote price. 

In this case, the Floor Broker would bid 

above the final quote bid (i.e., bid 3.20) 

or offer below the final quote offer (i.e., 

offer at 3.10), each instance of which is 

equal to a final quote price. The Floor 

Broker would then be obligated to trade 

with the final quote interest at that price 

(i.e., buy 50 at 3.20 or sell 20 at 3.10) 

before crossing the balance of the 

orders. 

Additionally, if, because of movement 

in the markets while the order was 

being brought to the crowd, the limit on 

one of the orders only allowed for a 

cross to be effected at a final quote 

price, regardless of the width of the final 

quote, the Floor Broker would be 


emcdonald on DSK2BSOYB1PROD with NOTICES