25784 Federal Register / Vol. 74, No. 102 / Friday, May 29, 2009 / Notices 

13See supra note 3. 

14See telephone conversation between Clare F. 

Saperstein, Managing Director, NYSE Regulation, 

Inc., and Nancy J. Burke-Sanow, Assistant Director, 

Division of Trading and Markets, Commission, May 

21, 2009. 

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

16 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). 

4Securities Exchange Act Release No. 59721 

(April 7, 2009), 74 FR 17245 (April 14, 2009) (SR– 

Phlx–2009–32); Securities Exchange Act Release 

No. 59779 (April 16, 2009), 74 FR 18600 (April 23, 

2009) (SR–Phlx–2009–32, Amendment No. 1). 

5Securities Exchange Act Release No. 54170 (July 

18, 2006), 71 FR 42149 (July 25, 2006) (SR– 

NASDAQ–2006–006). 

6Securities Exchange Act Release No. 52902 

(December 7, 2005), 70 FR 73810 (December 13, 

2005) (SR–NASD–2005–128). 

7Securities Exchange Act Release No. 57478 

(March 12, 2008), 73 FR 14521 (March 18, 2008) 

(SR–NASDAQ–2007–004, –080). 

employees of others; (2) business 

conduct, trading against firm 

recommendations, and private sales; (3) 

excessive trading by members, excessive 

trading in discretionary accounts, 

successive transactions by members, 

manipulative operations, reopening 

contracts, and loans for accounts of nonmembers; (4) disciplinary proceedings 

concerning conduct that is inconsistent 

with just and equitable principles of 

trade; (5) reporting of certain 

information concerning short sales and 

proprietary transactions; (6) reporting 

and certification of member or member 

organization’s supervision and 

compliance efforts; (7) formation and 

approval or merger organizations; (8) 

reporting of short positions; (9) 

notification requirements for listed 

securities; and (10) disclosure and 

monitoring of non-managed fee based 

accounts. 

In the place of the deleted rules and 

interpretations, the Exchange proposes 

to adopt rules that are identical to, or 

substantially identical to, FINRA Rules 

that were approved by the Commission 

or were effective upon filing with the 

Commission.13 In addition, NYSE is 

making non-substantive changes to the 

FINRA Rules that it is incorporating to 

reflect that they are NYSE rules and is 

deleting NYSE rules that have become 

outdated and are no longer needed. The 

Commission believes that the proposed 

rule change is appropriate and should 

reduce unnecessary regulatory 

duplication of Dual Members by 

harmonizing certain NYSE rules with 

FINRA Rules. With respect to the 

Exchange’s proposal to delete NYSE 

Rule 350 (and accompanying 

interpretations) and to adopt NYSE Rule 

3220 (relating to influencing or 

rewarding employees of others), the 

Commission notes that NYSE has stated 

that immediately upon Commission 

approval of new NYSE Rule 3220, it will 

issue an Information Memorandum to 

its members and member organizations, 

including NYSE-only members and 

those members registered with FINRA, 

clarifying that FINRA’s interpretive 

guidance related to FINRA Rule 3220 is 

considered part of NYSE Rule 3220, and 

that such members and member 

organizations are required to regulate 

their conduct according to Rule 3220 

and the interpretive guidance related to 

FINRA Rule 3220.14 Accordingly, the 

Commission believes that the proposed 

rule change is consistent with the 

requirements of the Act. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,15 that the 

proposed rule change (SR–NYSE–2009– 

25) be, and it hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–12451 Filed 5–28–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59948; File No. SR– 

NASDAQ–2009–047] 

Self-Regulatory Organizations; the 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to 

Order Routing 

May 20, 2009. 

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 May 15, 

2009, The NASDAQ Stock Market LLC 

(the ‘‘NASDAQ Exchange’’) 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 NASDAQ 

Exchange. The NASDAQ Exchange has 

designated the proposed rule change as 

constituting a non-controversial rule 

change under Rule 19b–4(f)(6) under the 

Act,3 which renders the proposal 

effective upon filing with the 

Commission. 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 NASDAQ Exchange is proposing 

to modify the terms and conditions 

under which it is affiliated with 

NASDAQ Options Services, LLC 

(‘‘NOS’’). The NASDAQ Exchange 

proposes to implement the proposed 

rule change when NASDAQ OMX 

PHLX, Inc. (‘‘PHLX’’) implements its XL 

II trading system.4 There is no proposed 

rule language. 

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 

NASDAQ 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 

NASDAQ Exchange 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 

Nasdaq Options Services, LLC 

(‘‘NOS’’), which is a subsidiary of the 

NASDAQ Exchange, is a registered 

broker-dealer and a member of the 

NASDAQ Exchange and PHLX. In SR– 

NASDAQ–2006–006,5 the Commission 

approved the adoption of NASDAQ 

Exchange Rule 2140, which provides 

that, subject to certain exceptions, the 

NASDAQ Exchange may not become an 

affiliate of one of its members unless the 

terms and conditions of such affiliation 

are the subject of an effective filing with 

the Commission. Previously, the 

Commission had approved the 

acquisition of the entity that is now 

NOS by The Nasdaq Stock Market, Inc., 

which is now The NASDAQ OMX 

Group, Inc. (‘‘NASDAQ OMX’’), the 

holding company parent corporation of 

the NASDAQ Exchange and PHLX.6

Moreover, in SR–NASDAQ–2007–004 

and –080,7 the Commission approved 

rules to govern the operation of The 

NASDAQ Options Market (‘‘NOM’’) as 

an options market of the NASDAQ 

Exchange, including rules establishing 

NOS as the approved outbound routing 

facility of the NASDAQ Exchange for 

NOM. The rules governing NOS’s 

routing of orders for NOM stipulate, 

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Federal Register / Vol. 74, No. 102 / Friday, May 29, 2009 / Notices 25785 

8Securities Exchange Act Release No. 59420 

(February 19, 2009), 74 FR 8597 (February 25, 2009) 

(SR–NASDAQ–2009–011). 

9Securities Exchange Act Release No. 59721 

(April 7, 2009), 74 FR 17245 (April 14, 2009) (SR– 

Phlx–2009–32); Securities Exchange Act Release 

No. 59779 (April 16, 2009), 74 FR 18600 (April 23, 

2009) (SR–Phlx–2009–32, Amendment No. 1). 

10The Financial Industry Regulatory Authority 

(‘‘FINRA’’) serves as NOS’s designated examining 

authority. FINRA is unaffiliated with both PHLX 

and the NASDAQ Exchange. 

11 15 U.S.C. 78f. 

12 15 U.S.C. 78f(b)(5). 

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

14 17 CFR 240.19b–4(f)(6). 

15 17 CFR 240.19b–4(f)(6)(iii). In addition, Rule 

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

organization 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 NASDAQ Exchange has satisfied 

this requirement. 

16 Id. 

among other things, that: (i) NOS is a 

facility of the NASDAQ Exchange; (ii) 

use of NOS’s routing function by 

NASDAQ Exchange members is 

optional; (iii) NOS does not provide 

routing of orders in options from NOM 

to an exchange that is an affiliate of 

NASDAQ unless such orders first 

attempt to access any liquidity on the 

NOM book; 8 and (iv) NOS is a member 

of a self-regulatory organization that is 

unaffiliated with the NASDAQ 

Exchange and that serves as NOS’s 

designated examining authority. 

In SR–PHLX–2009–32,9 PHLX, 

another exchange subsidiary of 

NASDAQ OMX, has proposed 

establishing NOS as PHLX’s routing 

facility (the ‘‘Routing Facility’’). The 

sole use of the Routing Facility by the 

PHLX’s new proposed Phlx XL II system 

will be to route orders in options listed 

and open for trading on the Phlx XL II 

system to away markets pursuant to 

PHLX rules on behalf of PHLX. 

Proposed PHLX Rule 1080(m)(iii)(B) 

would provide that the use of NOS to 

route orders to other market centers is 

optional. Parties that do not desire to 

use NOS must designate orders as not 

available for routing (i.e., a Do Not 

Route Order, as described in proposed 

PHLX Rule 1080(m)(iv)(A)). 

Proposed PHLX Rule 1080(m)(iii)(C) 

would provide that PHLX will establish 

and maintain procedures and internal 

controls reasonably designed to 

adequately restrict the flow of 

confidential and proprietary 

information between PHLX and the 

Routing Facility, and any other entity, 

including any affiliate of the Routing 

Facility, and, if the Routing Facility or 

any of its affiliates engages in any other 

business activities other than providing 

routing services to the Exchange, 

between the segment of the Routing 

Facility or affiliate that provides the 

other business activities and the routing 

services. In SR–PHLX–2009–32, PHLX 

further noted that NOS is a member of 

a self-regulatory organization that is 

unaffiliated with PHLX and that serves 

as NOS’s designated examining 

authority.10

Finally, proposed PHLX Rule 

1080(m)(iii)(D) would state that the 

books, records, premises, officers, 

directors, agents, and employees of the 

Routing Facility, as a facility of PHLX, 

will be deemed to be the books, records, 

premises, officers, directors, agents, and 

employees of PHLX for purposes of and 

subject to oversight pursuant to the Act. 

The books and records of the Routing 

Facility, as a facility of PHLX, will be 

subject at all times to inspection and 

copying by PHLX and the Commission. 

PHLX has also adopted a rule 

restricting affiliation between PHLX and 

its members, comparable to the 

NASDAQ Exchange’s Rule 2140. See 

PHLX Rule 985(b). In SR–PHLX–2009– 

32, PHLX has requested that the 

Commission allow PHLX to use NOS to 

provide routing services for orders 

routed to all destinations, provided they 

first attempt to access liquidity on 

PHLX’s systems before routing to other 

exchanges. Thus, the terms and 

conditions of PHLX’s order routing 

would be substantially similar to those 

already approved with respect to 

routing by NOM through NOS. 

Because orders from PHLX may be 

routed to NOM through NOS, it is 

necessary for the NASDAQ Exchange to 

submit this filing to establish that NOM 

may receive such routed orders. 

Accordingly, the NASDAQ Exchange 

proposes that NOS be permitted to route 

orders from PHLX to NOM subject to the 

following: (i) NOS is approved as and 

remains a facility of PHLX; (ii) use of 

NOS’s Routing Facility function by 

PHLX members continues to be 

optional; (iii) NOS does not provide 

routing of orders in options from PHLX 

to the NASDAQ Exchange or any 

trading facilities thereof, unless such 

orders first attempt to access any 

liquidity on the PHLX book, and (iv) 

NOS is a member of a self-regulatory 

organization that is unaffiliated with 

PHLX and the NASDAQ Exchange and 

that serves as NOS’s designated 

examining authority. The terms and 

conditions under which NOM would 

receive orders from PHLX through NOS 

are the same as the terms and conditions 

under which PHLX has been approved 

to receive orders from NOM through 

NOS. 

2. Statutory Basis 

The NASDAQ Exchange believes that 

the proposed rule change is consistent 

with the provisions of Section 6 of the 

Act,11 in general, and with Section 

6(b)(5) of the Act,12 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 rule change would permit 

inbound routing of orders from PHLX to 

NOM through NOS in accordance with 

the terms and conditions governing 

order routing that have been approved 

by the Commission with respect to 

receipt of orders by PHLX from NOM 

through NOS. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The NASDAQ 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. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments on the proposed 

rule change were neither solicited nor 

received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the 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) does not become operative for 30 

days after the date of the 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 13 and Rule 19b– 

4(f)(6) thereunder.14

A proposed rule change filed under 

19b–4(f)(6) normally may not become 

operative prior to 30 days after the date 

of filing.15 However, Rule 19b– 

4(f)(6)(iii) 16 permits the Commission to 

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25786 Federal Register / Vol. 74, No. 102 / Friday, May 29, 2009 / Notices 

17See Securities Exchange Act Release No. 58179 

(July 17, 2008), 73 FR 42874 (July 23, 2008) (SR– 

Phlx-2008–31). 

18See SR–NASDAQ–2009–047, Items 2 and 7. 

19For the 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). 

20 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 

2 15 U.S.C. 78s(b)(3)(A)(i). 

3 17 CFR 240.19b–4(f)(1). 

4The Commission has modified parts of these 

statements. 

5Securities Exchange Act Release Nos. 57543 

(March 20, 2008), 73 FR 16405 (March 27, 2008) 

and 58258 (July 30, 2008), 73 FR 46133 (August 7, 

2008), respectively. 

designate a shorter time if such action 

is consistent with the protection of 

investors and the public interest. The 

NASDAQ Exchange has requested that 

the Commission waive the 30-day 

operative delay. The Commission notes 

that the NASDAQ Exchange’s proposal 

is substantially similar to the proposal 

of another national securities exchange 

previously approved by the Commission 

and does not raise any new substantive 

issues.17 The NASDAQ Exchange 

proposes to implement the proposed 

rule change when PHLX implements its 

XLII trading system, and states that 

waiving the operative delay will ensure 

that the NASDAQ Exchange is able to 

implement the proposed rule change at 

such time.18 For these reasons, the 

Commission believes that waiving the 

30-day operative delay is consistent 

with the protection of investors and the 

public interest, and designates the 

proposed rule change to be operative 

upon filing with the Commission.19

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission may summarily abrogate 

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–2009–047 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–2009–047. 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 inspection and copying 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 NASDAQ 

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–2009–047 and should be 

submitted on or before June 19, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.20

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–12449 Filed 5–28–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59945; File No. SR–OCC– 

2009–09] 

Self-Regulatory Organizations; the 

Options Clearing Corporation; Notice 

of Filing and Immediate Effectiveness 

of a Proposed Rule Change Relating to 

Cross-Margining of Security Futures 

on Exchange-Traded Funds Based on 

Broad-Based Stock Indices 

May 20, 2009. 

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

Securities Exchange Act of 1934 

(‘‘Act’’),1 notice is hereby given that on 

April 17, 2009, The Options Clearing 

Corporation (‘‘OCC’’) 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 primarily by OCC. OCC filed 

the proposed rule change pursuant to 

Section 19(b)(3)(A)(i) of the Act 2 and 

Rule 19b–4(f)(1) 3 thereunder so that the 

proposal was effective upon filing with 

the Commission. 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 proposed rule change would 

certify security futures contracts on two 

exchange-traded funds (‘‘ETFs’’) based 

on broad-based stock indices as eligible 

contracts for purposes of OCC–CME 

cross-margining. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

OCC 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. OCC has prepared 

summaries, set forth in sections (A), (B), 

and (C) below, of the most significant 

aspects of such statements.4

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In proposed rule change File Nos. SR– 

OCC–2008–03 and SR–OCC–2008–12, 

respectively, OCC submitted rule 

changes to (i) expand its crossmargining programs with commodity 

clearing organizations to include as 

eligible contracts security futures on 

ETFs based on broad-based securities 

indices and (ii) file an Amended and 

Restated OCC–CME Cross-Margining 

Agreement (‘‘OCC–CME XM 

Agreement’’) and related forms of 

clearing member and market 

professional’s agreements.5 The Exhibit 

A attached to the OCC–CME XM 

Agreement referenced security futures 

on two such ETFs, Standard & Poor’s 

Depository Receipts (‘‘SPY’’) and 

mstockstill on PROD1PC66 with NOTICES