Federal Register / Vol. 74, No. 109 / Tuesday, June 9, 2009 / Notices 27365 

9 15 U.S.C. 78o–3(b)(6). 

10 15 U.S.C. 78o–3(b)(7). 

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). 

member or an associated person that has 

engaged (or is engaging) in violative 

conduct that could cause continuing 

harm to the investing public if not 

addressed expeditiously. It must be 

emphasized, however, that the cease 

and desist provisions contain numerous 

procedural protections for respondents 

to ensure that the proceedings are fair. 

The proposed rule change will 

become effective on the date of the 

SEC’s approval. 

2. Statutory Basis 

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’s rules must 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 proposed rule 

change also is consistent with the 

provisions of Section 15A(b)(7) of the 

Act,10 which provides that FINRA 

members, or persons associated with its 

members, must be appropriately 

disciplined for violations of any 

provisions of the Act or FINRA’s rules. 

Making the pilot program permanent is 

consistent with FINRA’s obligations 

under the Act because cease and desist 

orders are designed to stop violative 

conduct that is likely to cause 

dissipation or conversion of assets or 

other significant harm to investors. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

FINRA 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 were neither 

solicited nor received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 35 days of the date of 

publication of this notice in the Federal 

Register or within such longer period (i) 

as the Commission may designate up to 

90 days of such date 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 the 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–FINRA–2009–035 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–FINRA–2009–035. 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 such filing also will be 

available for inspection and copying at 

the principal office of FINRA. 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 No. 

SR–FINRA–2009–035 and should be 

submitted on or before June 30, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–13397 Filed 6–8–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60039; File No. SR– 

NASDAQ–2009–050] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

a Proposed Rule Change, as Modified 

by Amendment No. 1 Thereto, To 

Reduce the Length of the Optional PreRouting Display Period for Its DOT, 

SCAN and STGY Routing Strategies 

June 3, 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, The NASDAQ Stock Market LLC 

(‘‘Nasdaq’’ or 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 Nasdaq. On June 2, 

2009, Nasdaq filed Amendment No. 1 to 

the proposed rule change. Nasdaq has 

designated the proposed rule change, as 

amended, as constituting a 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, as amended, from interested 

persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

Nasdaq proposes a rule change to 

reduce the length of the optional prerouting display period for its DOT, 

SCAN and STGY routing strategies. 

The text of the proposed rule change 

is below. Proposed new language is 

italicized; proposed deletions are in 

brackets. 

27366 Federal Register / Vol. 74, No. 109 / Tuesday, June 9, 2009 / Notices 

4 15 U.S.C. 78f. 

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

4758. Order Routing 

(a) Order Routing Process 

(1) The Order Routing Process shall be 

available to Participants from 7 a.m. 

until 8 p.m. Eastern Time, and shall 

route orders as described below: All 

routing of orders shall comply with Rule 

611 of Regulation NMS under the 

Exchange Act. 

(A) The System provides three routing 

options. Of these three, DOT is only 

available for orders ultimately sought to 

be directed to either the New York Stock 

Exchange (‘‘NYSE’’) or NYSE Amex. 

The System will consider the quotations 

only of accessible markets or NYSE 

Amex. The System will consider the 

quotations only of accessible markets[.] 

and will provide an electronic method 

to distinguish orders displayed during a 

pre-routing display period from the 

System’s protected quote under 

Regulation NMS. The three System 

routing options are: 

(i) DOT (‘‘DOT’’)—under this option, 

after checking the System for available 

shares if so instructed by the entering 

firm, orders are sent to other available 

market centers for potential execution, 

per entering firm’s instructions, before 

being sent to the destination exchange, 

so long as the price at such market 

centers would not violate the Order 

Protection Rule. If instructed by the 

entering firm, prior to sending orders to 

other available markets, such orders 

shall be displayed to Nasdaq market 

participants (and market data vendors) 

for potential execution, at the NBBO 

price, for a period of time not to exceed 

[3 seconds] one-half of one second as 

determined by Nasdaq. Any unexecuted portion will thereafter be sent 

to the NYSE or NYSE Amex, as 

appropriate, at the order’s original limit 

order price. This option may only be 

used for orders with time-in-force 

parameters of either SDAY, SIOC, 

MDAY, MIOC, GTMC or market-onopen/close. Notwithstanding the 

foregoing, orders designated for 

participation in the NYSE or NYSE 

Amex opening or closing processes will 

not check the System for available 

shares prior to routing. 

(ii) Reactive Electronic Only 

(‘‘STGY’’)—under this option, after 

checking the System for available shares 

if so instructed by the entering firm, 

orders are sent to other available market 

centers for potential execution, per 

entering firm’s instructions. When 

checking the book, the System will seek 

to execute at the price it would send the 

order to a destination market center. If 

instructed by the entering firm, prior to 

sending orders to other available 

markets, such orders shall be displayed 

to Nasdaq market participants (and 

market data vendors) for potential 

execution, at the NBBO price, for a 

period of time not to exceed [3 seconds] 

one-half of one second as determined by 

Nasdaq. If shares remain un-executed 

after routing, they are posted on the 

book. Once on the book, should the 

order subsequently be locked or crossed 

by another accessible market center, the 

System shall route the order to the 

locking or crossing market center. With 

the exception of the Minimum Quantity 

order type, all time-in-force parameters 

and order types may be used in 

conjunction with this routing option. 

(iii) Electronic Only Scan (‘‘SCAN’’)— 

under this option, after checking the 

System for available shares if so 

instructed by the entering firm, orders 

are sent to other available market 

centers for potential execution, per 

entering firm’s instructions, in 

compliance with Rule 611 under 

Regulation NMS. When checking the 

book, the System will seek to execute at 

the price it would send the order to a 

destination market center. If instructed 

by the entering firm, prior to sending 

orders to other available markets, such 

orders shall be displayed to Nasdaq 

market participants (and market data 

vendors) for potential execution, at the 

NBBO price, for a period of time not to 

exceed [3 seconds] one-half of one 

second as determined by Nasdaq. If 

shares remain un-executed after routing, 

they are posted on the book. Once on 

the book, should the order subsequently 

be locked or crossed by another market 

center, the System will not route the 

order to the locking or crossing market 

center. With the exception of the 

Minimum Quantity order type, all timein-force parameters and order types may 

be used in conjunction with this routing 

option. Orders that do not check the 

System for available shares prior to 

routing may not be sent to a facility of 

an exchange that is an affiliate of 

Nasdaq, except for orders that are sent 

to the NASDAQ OMX BX Equities 

Market. 

(B) No Change. 

(b) No Change. 

* * * * * 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

Nasdaq 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. Nasdaq 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 is proposing to reduce the 

maximum length of the optional prerouting period for its DOT, SCAN and 

STGY routing strategies. Currently, the 

maximum time period for the optional 

pre-route period is 3 seconds, and 

Nasdaq is now proposing to reduce this 

maximum pre-route time period to onehalf of one second. Orders entered using 

any form of the DOT, SCAN or STGY 

routing strategies will, after first 

executing to the maximum extent 

possible in Nasdaq’s book, have their 

remaining share amounts and prices 

displayed to Nasdaq market participants 

and market data vendors for a period of 

time determined by Nasdaq which will 

not, under the proposal, exceed one-half 

of one second. This display to Nasdaq 

market participants and market data 

vendors takes place before routing any 

order or order remainder to any other 

available market and parties not wishing 

to have their orders displayed prior to 

routing may direct the system to avoid 

the pre-routing display period. Nasdaq 

will provide an electronic method to 

distinguish orders displayed during the 

pre-routing display period from the 

System’s protected quote under 

Regulation NMS. 

Except for the changes to the DOT, 

SCAN and STGY routing functionality 

itself described here, nothing in this 

proposal will modify or alter any 

existing rule or process related to order 

priority, order execution, trade-through 

protection or locked or crossed markets. 

2. Statutory Basis 

Nasdaq believes that the proposed 

rule change is consistent with the 

provisions of Section 6 of the Act,4 in 

general, and with Sections 6(b)(5) of the 

Act,5 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 

Federal Register / Vol. 74, No. 109 / Tuesday, June 9, 2009 / Notices 27367 

6Securities Exchange Act Release No. 54422 

(September 11, 2006), 71 FR 54537 (September 15, 

2006) (SR–CBOE–2004–21); Securities Exchange 

Act Release No. 59359 (February 4, 2009), 74 FR 

6927 (February 11, 2009) (SR–CBOE–2008–123). 

7 15 U.S.C. 78s(b)(3)(A). 

8 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6) requires a self-regulatory organization to give 

the Commission written notice of its intent to file 

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 Commission has determined to 

waive the five-day pre-filing period in this case. 

9 17 CFR 240.19b–4(f)(6). 

10 17 CFR 240.19b–4(f)(6). 

11For 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). 

12For purposes of calculating the 60-day period 

within which the Commission may summarily 

abrogate the proposed rule change under Section 

19(b)(3)(C) of the Act, the Commission considers 

the period to commence on June 2, 2009, the date 

on which Nasdaq submitted Amendment No. 1. See 

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

13 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). 

public interest. Nasdaq notes that 

similar functionality has already been 

found to be consistent with the Act by 

the Commission.6

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

Nasdaq 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, as amended. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

Written comments were neither 

solicited nor received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not: (i) Significantly affect 

the protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) become 

operative for 30 days from the date on 

which it was filed, or such shorter time 

as the Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 7 and Rule 19b– 

4(f)(6) thereunder.8

A proposed rule change filed 

pursuant to Rule 19b–4(f)(6) under the 

Act 9 normally does not become 

operative for 30 days after the date of its 

filing. However, Rule 19b–4(f)(6) 10

permits the Commission to designate a 

shorter time if such action is consistent 

with the protection of investors and the 

public interest. Nasdaq requests that the 

Commission waive the 30-day operative 

delay because the Exchange expects to 

have technologies in place to support 

the proposed rule change, as amended, 

on or about June 8, 2009, and believes 

that the expected benefits to Nasdaq 

market participants from the proposed 

rule change, as amended, should not be 

delayed. The Commission believes that 

waiving the 30-day operative delay 11 is 

consistent with the protection of 

investors and the public interest and 

designates the proposal operative on 

June 8, 2009. 

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.12

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–2009–050 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–2009–050. 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 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 publicly available. All 

submissions should refer to File 

Number SR–NASDAQ–2009–050 and 

should be submitted on or before June 

30, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–13424 Filed 6–8–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60037; File No. SR– 

NASDAQ–2009–048] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

a Proposed Rule Change, as Modified 

by Amendment No. 1, Thereto To 

Establish a New Voluntary Flash and 

Cancel Order 

June 3, 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 20, 

2009, The NASDAQ Stock Market LLC 

(‘‘Nasdaq’’ or 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 Nasdaq. On May 29, 

2009, Nasdaq filed Amendment No. 1 to 

the proposed rule change. Nasdaq has 

designated the proposed rule change, as 

amended, as constituting a rule change 

under Rule 19b–4(f)(6) under the Act,3

which renders the proposal, as 

amended, effective upon filing with the 

Commission. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change, 

as amended, from interested persons.