Federal Register / Vol. 74, No. 106 / Thursday, June 4, 2009 / Notices 26903 

5ATSs generally are registered broker-dealers that 

provide or maintain a marketplace for bringing 

together purchasers and sellers of securities or 

otherwise perform the functions commonly 

performed by a securities exchange but do not 

perform self-regulatory functions. 

6A security future is a contract of sale for future 

delivery of a single security or of a narrow-based 

security index. Security futures are defined as 

‘‘securities’’ under the Act; consequently, the 

federal securities laws are generally applicable to 

security futures. See 15 U.S.C. 78c(a)(10). 

7See U.S. Government Accountability Office, 

‘‘Securities Investor Protection: Steps Needed to 

Better Disclose SIPC Policies to Investors,’’ 

Publication GAO–01–653 (May 25, 2001). 

8 In approving this proposal, the Commission has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

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

9 15 U.S.C. 78o–3(b)(6). 

10 15 U.S.C. 78s(b)(2). 

11 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). 

systems (‘‘ATSs’’) 5 that accept orders 

for security futures 6 to record and 

report to FINRA certain information 

regarding those orders, including the 

date and time the order was received, 

the security future product name and 

symbol, the details of the order, and the 

date and time that the order was 

executed. The rule provides FINRA with 

an audit trail of orders for security 

futures placed on an ATS. 

FINRA is proposing to adopt NASD 

Rule 2342 without material change in 

the Consolidated FINRA Rulebook as 

FINRA Rule 2266 and to delete 

comparable Incorporated NYSE Rule 

409A. NASD Rule 2342 and 

Incorporated NYSE Rule 409A were 

adopted in response to a May 2001 

report issued by the Government 

Accountability Office (‘‘GAO’’), entitled 

‘‘Securities Investor Protection: Steps 

Needed to Better Disclose SIPC Policies 

to Investors.’’ 7

III. Discussion and Findings 

After careful review, the Commission 

finds that the proposed rule change is 

consistent with the requirements of the 

Act and the rules and regulations 

thereunder applicable to a national 

securities association.8 In particular, the 

Commission finds that the proposed 

rule change is consistent with the 

provisions of Section 15A(b)(6) of the 

Act,9 which requires, among other 

things, that FINRA rules be designed to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, and, in 

general, to protect investors and the 

public interest. 

The Commission believes that that 

transferring NASD Rule 2130 into the 

Consolidated FINRA Rulebook will 

ensure that its standards and procedures 

regarding expungement of customer 

dispute information from the CRD 

continue to be reasonably designed to 

ensure that information submitted to 

and maintained in the CRD is accurate 

and complete. The Commission believes 

that transferring NASD Rule 2810 into 

the Consolidated FINRA Rulebook will 

ensure that policies and procedures 

regarding FINRA’s members’ 

participation in public offerings of 

Investment Programs continue to meet 

statutory mandates. The Commission 

believes that transferring NASD Rule 

3115 into the Consolidated FINRA 

Rulebook will continue to allow ATSs 

to provide trading facilities for security 

futures while also ensuring that FINRA 

will receive sufficient information to 

maintain an audit trail regarding the 

trading of security futures on ATSs. 

Finally, the Commission believes that 

transferring NASD Rule 2342 into the 

Consolidated FINRA Rulebook will 

continue to ensure that SIPC 

information is provided to customers 

effectively. The proposed rule change 

makes non-material changes to rules 

that have proven effective in meeting 

the statutory mandates. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,10 that the 

proposed rule change (SR–FINRA– 

2009–016), as amended, be, and hereby 

is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–12997 Filed 6–3–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59999; File No. SR–BX– 

2009–026] 

Self-Regulatory Organizations; 

NASDAQ OMX BX, Inc.; Notice of Filing 

and Immediate Effectiveness of 

Proposed Rule Change Relating to 

Order Routing 

May 28, 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 21, 

2009, NASDAQ OMX BX, Inc. (the 

‘‘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 Exchange. The 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 Exchange is proposing to modify 

the terms and conditions under which 

the Exchange is affiliated with NASDAQ 

Options Services, LLC (‘‘NOS’’). The 

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 

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 

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 

The NASDAQ OMX Group, Inc. 

(‘‘NASDAQ OMX’’) acquired the 

Exchange in August 2008. Prior to the 

acquisition, the Exchange owned a 

21.87% interest in Boston Options 

Exchange Group, LLC (‘‘BOX LLC’’), the 

operator of the Boston Options 

Exchange facility (‘‘BOX’’). BOXR is a 

wholly-owned subsidiary of the 

Exchange, to which the Exchange has 

delegated, pursuant to a delegation plan, 

certain self-regulatory responsibilities 

related to the BOX. 

At the closing of the acquisition by 

NASDAQ OMX, the Exchange 

transferred its interest in BOX LLC to 

26904 Federal Register / Vol. 74, No. 106 / Thursday, June 4, 2009 / Notices 

5Securities Exchange Act Release No. 58324 

(August 7, 2008), 73 FR 46936 (August 12, 2008) 

(SR–BSE–2008–02, –23, –25; SR–BSECC–2008–01) 

(the ‘‘Acquisition Approval Order’’). 

6 In connection with the adoption of new rules to 

govern trading of cash equity securities on the 

Exchange, the Exchange adopted Equity Rule 2140, 

which, like Chapter XXXIX, Section 2, restricts 

affiliation between the Exchange and its members. 

Securities Exchange Act Release No. 59154 

(December 23, 2008), 73 FR 80468 (December 31, 

2008) (SR–BSE–2008–48). In the same filing, the 

Exchange designated Chapter XXXIX, Section 2 for 

inclusion in the ‘‘Grandfathered Rules’’ of the 

Exchange, which are rules in effect prior to the 

acquisition of the Exchange by NASDAQ OMX that 

continue to apply to BOX market participants, 

while designating Rule 2140 as an ‘‘Equity Rule’’ 

applicable to members of the Exchange. Because 

NOS is both an Exchange member and a BOX 

market participant, this filing should be construed 

to relate both to Rule 2140 and Chapter XXXIX, 

Section 2. 

7Securities 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). 

8The Financial Industry Regulatory Authority 

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

authority. FINRA is unaffiliated with the Exchange, 

PHLX, the NASDAQ Exchange, and BOX. 

9 15 U.S.C. 78f. 

10 15 U.S.C. 78f(b)(5). 

MX US, a wholly-owned subsidiary of 

the Montreal Exchange Inc. Although 

the Exchange no longer holds an 

ownership interest in BOX LLC, it 

continues to hold self-regulatory 

obligations with respect to BOX. The 

Exchange, together with BOXR, retains 

regulatory control over BOX and the 

Exchange, and remains responsible for 

ensuring compliance with the federal 

securities laws and all applicable rules 

and regulations. 

In its order approving certain 

proposed rule changes necessary to 

allow the acquisition of the Exchange by 

NASDAQ OMX, the Commission 

approved the adoption of Chapter 

XXXIX, Section 2 of the Exchange’s 

rules, which provides that, subject to 

certain exceptions, the 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.5 Also in the Acquisition 

Approval Order, the Commission 

approved the Exchange becoming an 

affiliate of Nasdaq Options Services, 

LLC (‘‘NOS’’), which is an indirect 

subsidiary NASDAQ OMX, a registered 

broker-dealer, a member of the 

Exchange, and a BOX market 

participant.6

The NASDAQ Options Market 

(‘‘NOM’’) is an options market operated 

by The NASDAQ Stock Market (the 

‘‘NASDAQ Exchange’’), and NOS is the 

approved outbound routing facility of 

the NASDAQ Exchange for NOM. The 

Commission has approved NOS’s 

affiliation with the Exchange subject to 

the conditions that: (i) NOS remains a 

facility of the NASDAQ Exchange; (ii) 

use of NOS’s routing function by 

NASDAQ Exchange members continues 

to be optional; and (iii) NOS does not 

provide routing of orders in options 

from NOM to the Exchange or any 

trading facilities thereof, unless such 

orders first attempt to access any 

liquidity on the NOM book. In addition, 

the Commission noted in the 

Acquisition Approval Order that 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–2009–32,7 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.8

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 

Exchange’s rules. 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 BOX through NOS, it is 

necessary for the Exchange to submit 

this filing to establish that BOX may 

receive such routed orders. Accordingly, 

the Exchange proposes that NOS be 

permitted to route orders from PHLX to 

BOX 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 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 

Exchange and that serves as NOS’s 

designated examining authority. The 

terms and conditions under which BOX 

would receive orders from PHLX 

through NOS are the same as the terms 

and conditions under which it has been 

approved to receive them from NOM 

through NOS. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the provisions of Section 6 of the Act,9

in general, and with Section 6(b)(5) of 

the Act,10 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 

Federal Register / Vol. 74, No. 106 / Thursday, June 4, 2009 / Notices 26905 

11 15 U.S.C. 78s(b)(3)(A). 

12 17 CFR 240.19b–4(f)(6). 

13 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 Exchange has satisfied this 

requirement. 

14 Id. 

15See Securities Exchange Act Release No. 58179 

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

Phlx–2008–31). 

16See SR–BX–2009–026, Items 2 and 7. 

17For 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). 

18 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

inbound routing of orders from PHLX to 

BOX through NOS in accordance with 

the terms and conditions governing 

order routing that have been approved 

by the Commission with respect to 

routing of orders from NOM through 

NOS. 

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. 

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 11 and Rule 19b– 

4(f)(6) thereunder.12

A proposed rule change filed under 

19b–4(f)(6) normally may not become 

operative prior to 30 days after the date 

of filing.13 However, Rule 19b– 

4(f)(6)(iii) 14 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. The Commission notes that the 

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.15

The 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 Exchange is able to 

implement the proposed rule change at 

such time.16 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.17

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–BX–2009–026 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–BX–2009–026. 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 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–BX–2009–026 and should 

be submitted on or before June 25, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–12999 Filed 6–3–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60004; File No. SR–NYSE– 

2009–42] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Order 

Approving the Proposed Rule Change 

Implementing NYSE Realtime 

Reference Prices Service on a 

Permanent Basis 

May 29, 2009. 

I. Introduction 

On April 16, 2009, the New York 

Stock Exchange LLC (‘‘NYSE’’ or the 

‘‘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 

establish the NYSE Realtime Reference 

Prices service on a permanent basis and 

to establish a flat monthly fee for that 

service. The proposed rule change was 

published for comment in the Federal