66408 Federal Register / Vol. 75, No. 208 / Thursday, October 28, 2010 / Notices 

5The text of the proposed rule change is available 

on the Commission’s Web site at www.sec.gov. 

6 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

required to bid above the final quote bid 

or offer below the final quote offer yet 

still be at a final quote price. Again, the 

Floor Broker would be obligated to trade 

with the final quote interest at that price 

before crossing the balance of the 

orders. For instance, the electronic 

market in the series is 3.00 bid offered 

at 3.30, and the Floor Broker receives 

orders to cross at 3.10 or 3.20. When the 

Floor Broker requests a Final Quote, the 

crowd responds with a market of 3.20 

bid at 3.30. In order to meet the 

obligation to execute the order, the 

Floor Broker would have to offer at 3.20, 

fill the bids in the crowd at 3.20, and 

then cross the balance of the orders. 

Additionally, the Exchange proposes 

to add two commentaries to Rule 6.47. 

Commentary .02 would allow an OTP 

Holder to submit an order that has been 

solicited prior to transmittal to the 

Floor, but would not allow the new 

procedures to be used to circumvent 

limitations on principal transactions as 

described in Rule 6.47A, nor allow the 

OTP Holder to solicit a contra order 

from an NYSE Arca Market Maker 

assigned to the class of options to trade 

against an agency order. 

Commentary .03 would state it is a 

violation of a Floor Broker’s duty for 

best execution to cancel an agency order 

to avoid execution at a better price. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with and 

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

of the Act, in that it is designed to 

promote just and equitable principles of 

trade, remove impediments to and 

perfect the mechanisms 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 will provide 

encouragement for Market Makers to 

provide their best prices earlier, upon 

the initial presentation of trading 

interest to the crowd, and the broker 

will be required to better the crowd’s 

price in order to execute the cross 

transaction. The proposed new process 

should thus increase the possibility of 

price improvement for Customer orders. 

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 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 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

up to 90 days (i) as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or (ii) as to which 

the self-regulatory organization 

consents, the Commission will: 

(A) By order approve or disapprove 

such proposed rule change, or 

(B) Institute proceedings to determine 

whether the proposed rule change 

should be 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–NYSEArca–2010–90 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–NYSEArca–2010–90. 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.5 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– 

NYSEArca–2010–90 and should be 

submitted on or before November 18, 

2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.6

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–27266 Filed 10–27–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63163; File No. SR–EDGX– 

2010–14] 

Self-Regulatory Organizations; EDGX 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend EDGX 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 EDGX Exchange, Inc. (the 

‘‘Exchange’’ or the ‘‘EDGX’’) 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 

comments on the proposed rule change 

from interested persons. 


emcdonald on DSK2BSOYB1PROD with NOTICES
Federal Register / Vol. 75, No. 208 / Thursday, October 28, 2010 / Notices 66409 

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, EDGX 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). 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

EDGX 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 

Number SR–EDGX–2010–14 on the 

subject line. 


emcdonald on DSK2BSOYB1PROD with NOTICES
66410 Federal Register / Vol. 75, No. 208 / Thursday, October 28, 2010 / Notices 

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 EDGX, 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 17 CFR 240.19b–4. 

3 17 CFR 240.31. 4 15 U.S.C. 78f(f). 

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–EDGX–2010–14. 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, 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–EDGX– 

2010–14 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. 2010–27244 Filed 10–27–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63165; File No. SR–ISE– 

2010–102] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change Relating to the Sales Value 

Fee 

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 

14, 2010, the International Securities 

Exchange, LLC (the ‘‘Exchange’’ or the 

‘‘ISE’’) 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 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 adopt ISE 

Rule 212 (Sales Value Fee). The text of 

the proposed rule change is available on 

the Exchange’s Web site http:// 

www.ise.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 

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 

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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Pursuant to Section 31 of the 

Securities Act and Rule 31 thereunder,3

national securities exchanges and 

associations (collectively, ‘‘SROs’’) are 

required to pay a transaction fee to the 

Commission that is designed to recover 

the costs related to the government’s 

supervision and regulation of the 

securities markets and securities 

professionals. To offset this obligation, 

the Exchange Members are assessed 

charges in connection with satisfaction 

of the Exchange’s payment obligations 

under Section 31. The fee is collected 

indirectly from Exchange Members 

through their clearing firms by the 

Options Clearing Corporation (‘‘OCC’’) 

on behalf of the Exchange with respect 

to options sales and options exercises. 

The fee is collected by billing the 

Member’s designated clearing firm for 

the amount owed by the member to the 

Exchange. 

The Exchange is now proposing to 

codify this process by adopting 

proposed Rule 212 (Sales Value Fee). 

Proposed ISE Rule 212 defines the Sales 

Value Fee (‘‘Fee’’) as the fee assessed by 

ISE to each member for sales of 

securities on ISE with respect to which 

ISE is obligated to pay a fee to the 

Commission under Section 31 of the 

Exchange Act. Proposed ISE Rule 212 

provides that, to the extent the 

Exchange may collect more from 

Members under ISE Rule 212 than is 

due to from the Exchange to the 

Commission under Section 31 of the 

Exchange Act, for example due to 

rounding differences, the excess monies 

collected may be used by the Exchange 

to fund its general operating expenses. 

Proposed ISE Rule 212 explains that 

the transactions to which the Fee 

applies are sales of options (other than 

options on a security index) and sales of 

securities resulting from the exercise of 

physical-delivery options traded on ISE. 

As discussed above, the proposed rule 

specifies that the Fee is collected 

indirectly from Exchange Members 

through their clearing firms by the OCC 

on behalf of the Exchange with respect 

to options sales and options exercises. 

Proposed ISE Rule 212 also sets forth 

the formula for calculating the Fee with 

respect to covered options transactions, 

which is equal to (a) the Commission’s 

Section 31 fee rate multiplied by (b) the 

Member’s aggregate dollar mount [sic] of 

covered sales resulting from options 

transactions occurring on the Exchange 

during any computational period. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the objectives of Section 6 of the Act,4

in general, and furthers the objectives of 


emcdonald on DSK2BSOYB1PROD with NOTICES