29252 Federal Register / Vol. 74, No. 117 / Friday, June 19, 2009 / Notices 

9 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3For a complete description of Phlx XL II, see 

Securities Exchange Act Release No. 59995 (May 

28, 2009), 74 FR 26750 (June 3, 2009) (SR–Phlx– 

2009–32). The instant proposed fees will apply only 

to options entered into, and routed by, the Phlx XL 

II system. 

4An SQT is an Exchange Registered Options 

Trader (‘‘ROT’’) who has received permission from 

the Exchange to generate and submit option 

quotations electronically through AUTOM in 

eligible options to which such SQT is assigned. An 

SQT may only submit such quotations while such 

SQT is physically present on the floor of the 

Exchange. See Exchange Rule 1014(b)(ii)(A). 

5An RSQT is an ROT that is a member or member 

organization with no physical trading floor 

presence who has received permission from the 

Exchange to generate and submit option quotations 

electronically through AUTOM in eligible options 

to which such RSQT has been assigned. An RSQT 

may only submit such quotations electronically 

from off the floor of the Exchange. See Exchange 

Rule 1014(b)(ii)(B). 

6See supra note 3. 

7See Exhibit 3 to the proposed rule change. See 

also infra note 9 

8See Securities Exchange Act Release No. 59995 

(May 28, 2009), 74 FR 26750 (June 3, 2009) (SR– 

Phlx–2009–32). 

All submissions should refer to File 

Number SR–NYSEArca-2009–50. 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 will also be available 

for inspection and copying at the 

principal office of the self-regulatory 

organization. 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-2009–50 and should be 

submitted on or before July 10, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–14352 Filed 6–18–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60103; File No. SR–Phlx– 

2009–47] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX, Inc.; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to 

Order Routing Fees 

June 11, 2009. 

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 June 5, 

2009, NASDAQ OMX PHLX, Inc. 

(‘‘Phlx’’ or ‘‘Exchange’’) 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 

substantially 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 fees 

governing pricing for Phlx members 

using the Phlx XL II system,3 for routing 

standardized equity and index options 

to away markets for execution. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http:// 

nasdaqomxphlx.cchwallstreet.com/ 

NASDAQOMXPHLX/Filings/, 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 

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 purpose of the proposed rule 

change is to adopt fees for executions of 

options orders entered into the 

Exchange’s enhanced electronic trading 

platform for options, Phlx XL II but 

routed to away markets. The Exchange 

proposes a routing fee based upon the 

cost to the Exchange of executing such 

orders at those markets. In order to 

reflect the Exchange’s cost of execution 

at away markets, the fees will be 

separated as applicable, depending on 

the away market’s fee schedule, by type 

of option (penny pilot, equity/nonpenny pilot, ETF or HLDS/non-penny 

pilot, and Index) and vary depending 

upon whether the order is being routed 

for a customer, a member firm, a market 

maker (which includes a specialist, a 

Registered Options Trader, a Streaming 

Quote Trader (‘‘SQT’’),4 and a Remote 

Streaming Quote Trader (‘‘RSQT’’)),5 or 

by a Floor Broker. Initially, the Phlx XL 

II system will only route customer 

orders.6 The Table reflects that routing 

fees are currently not applicable to firms 

and market makers, since their order 

will not be routed by the Phlx XL II 

system. In the event that the Exchange 

determines to route firm and market 

maker orders, membership will be 

notified by an Options Trader Alert 

(‘‘OTA’’) of any applicable routing fees, 

and the Table will be updated to reflect 

such fees. 

The Exchange proposes to pass 

through to Exchange members the actual 

transaction fees (including surcharges/ 

license fees if applicable) assessed by 

away markets plus the clearing fees for 

the execution of orders routed from the 

Phlx XL II system. The Exchange has 

collected and organized in table format 

the fees to be assessed for routing to 

each destination exchange.7

The Exchange recently adopted Rule 

1080(m)(iii)(A) to establish Nasdaq 

Options Services LLC (‘‘NOS’’), a 

member of the Exchange, as the 

Exchange’s exclusive order router.8 The 

sole use of NOS by the Phlx XL II 

system will be to route orders in options 

listed and open for trading on the Phlx 

XL II system to destination markets. A 

particular destination market would 

charge NOS their applicable transaction 

fees, which would then be passed 

through to Phlx, and ultimately to the 

initiating member under this proposal. 

Similarly, clearing fees charged to NOS 

by the Options Clearing Corporation 

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Federal Register / Vol. 74, No. 117 / Friday, June 19, 2009 / Notices 29253 

9The Commission notes that the following link to 

this table is included in the proposed rule text: 

http://www.nasdaqtrader.com/ 

Micro.aspx?id=phlxpricing. 

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

11 15 U.S.C. 78f(b)(4). 

12 15 U.S.C. 78s(b)(3)(A)(ii). 

13 17 CFR 240.19b–4(f)(2). 

(‘‘OCC’’) would be passed through in 

this manner. 

The fees listed in the NASDAQ OMX 

PHLX Table of Routing Fees (the 

‘‘Table’’) will be updated as necessary to 

reflect changes in fees on destination 

exchanges. The Table generally should 

be accurate; however there may be 

instances in which a destination 

exchange submits a proposed rule 

change to amend its fee schedule on an 

immediately effective basis. In such a 

circumstance there may be a short time 

lag between such change to the 

destination market’s fee schedule and a 

corresponding change to the Table. 

Accordingly, members should review 

the fees that were imposed on the 

destination market at the time an order 

was routed to ensure that they are aware 

of the actual fees that were passed 

through to them. 

The Exchange believes that it is 

impractical to reflect and maintain in its 

fee schedule the table of fees assessed 

by each of the six competing away 

options markets. Because transaction 

and clearing costs are subject to frequent 

change on all of the options markets, the 

Exchange expects that maintaining an 

updated and accurate fee schedule 

would require it to file up to six changes 

or more each month in order to 

accurately reflect the changing fees for 

all six away markets. 

Accordingly, under the current 

proposed rule change, the Exchange will 

assess pass-through transaction and 

clearing fees for executions on away 

markets but, rather than reflect the 

actual fees in its fee schedule, the 

Exchange will cross-reference a location 

on its primary Web site for members, 

NasdaqTrader.com, where it will 

maintain the Table, setting forth fees 

applicable to options executions at away 

markets.9 The Exchange will maintain a 

current Table as well as an historical 

record of fees applicable on prior 

trading days in order to permit members 

to understand and evaluate their 

invoices from the Exchange. 

The Exchange believes that these 

routing fees and the proposed approach 

to displaying them are competitive, fair 

and reasonable, and non-discriminatory 

in that they replicate the fees assessed 

by away markets executing orders 

routed from the Exchange. The 

Exchange believes that displaying its 

fees on a well-publicized and accessible 

web site and maintaining an historical 

record of fee changes will provide 

sufficient transparency for Exchange 

members that voluntarily choose to use 

the Phlx XL II system to route orders in 

standardized options. 

The Exchange believes that these 

routing fees are inherently competitive, 

fair and reasonable, and nondiscriminatory in that they replicate the 

fees assessed by away markets executing 

orders routed from the Phlx XL II 

system. As with all fees, the Exchange 

may adjust these routing fees in 

response to competitive conditions by 

filing a new proposed rule change. 

This proposal is scheduled to become 

operative for option trades routed by the 

Phlx XL II system that settle on or after 

the initial date of deployment of the 

Phlx XL II system. The roll-out of the 

Phlx XL II system began on June 5, 

2009. Members will be notified of the 

date of deployment and the 

commencement of the imposition of the 

proposed fees by way of an Options 

Trader Alert (‘‘OTA’’) posted on the 

Exchange’s Web site. 

2. Statutory Basis 

The Exchange believes that its 

proposal to amend its schedule of fees 

is consistent with Section 6(b) of the 

Act 10 in general, and furthers the 

objectives of Section 6(b)(4) of the Act 11

in particular, in that it is an equitable 

allocation of reasonable fees and other 

charges among Exchange members. The 

Phlx is one of seven options markets in 

the national market system for 

standardized options. Joining Phlx and 

electing to trade options is entirely 

voluntary. Under these circumstances, 

Phlx’s fees must be competitive and low 

in order for Phlx to attract order flow, 

execute orders, and grow as a market. 

The various exchanges have filed these 

fees with the Commission and it is 

reasonable for Phlx to pass those fees 

through to its members. As such, Phlx 

believes that its fees are fair and 

reasonable and consistent with the Act. 

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 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 either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) of the Act 12 and 

paragraph (f)(2) of Rule 19b–4 13

thereunder. 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–Phlx–2009–47 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–Phlx–2009–47. 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 

mstockstill on PROD1PC66 with NOTICES

29254 Federal Register / Vol. 74, No. 117 / Friday, June 19, 2009 / Notices 

14 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(6). 

5NYSE Arca Equities Rule 1.1(yy). The term 

‘‘User’’ shall mean any ETP Holder or Sponsored 

Participant who is authorized to obtain access to the 

NYSE Arca Marketplace pursuant to Rule 7.29. 

6NYSE Arca Equities rule 1.1(a). The term ‘‘NYSE 

Arca Book’’ shall refer to the NYSE Arca 

Marketplace’s electronic file of orders, which 

contains all the User’s orders in each of the Directed 

Order, Display Order, Working Order and Tracking 

Order Processes. 

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

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

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

10 17 CFR 240.19b–4(f)(6). 

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

12 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires the Exchange to give the 

Commission written notice of the Exchange’s 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 the pre-filing requirement. 

between the hours of 10 a.m. and 3 p.m. 

Copies of the filing will also be available 

for inspection and copying at the 

principal office of the self-regulatory 

organization. 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–Phlx– 

2009–47 and should be submitted on or 

before July 10, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–14353 Filed 6–18–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60099; File No. SR– 

NYSEArca–2009–51] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change Amending Rule 7.36 

Governing Order Ranking and Display 

June 11, 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 June 4, 

2009, NYSE Arca, Inc. (‘‘NYSE Arca’’ 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 the self-regulatory organization. 

NYSE Arca filed the proposed rule 

change as a ‘‘non-controversial’’ 

proposal pursuant to Section 19(b)(3)(A) 

of the Act 3 and Rule 19b–4(f)(6) 

thereunder,4 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 proposes to amend 

NYSE Arca Equities Rule 7.36 governing 

order ranking and display. A copy of 

this filing is available on the Exchange’s 

Web site at http://www.nyse.com, at the 

Exchange’s principal office 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 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 

The purpose of this rule filing is to 

amend NYSE Arca Equities Rule 7.36 

governing order ranking and display. 

The Exchange proposes to add language 

that allows a limit order that has been 

modified to retain priority if the 

modification to the order involves a 

decrease in the size of the order. In the 

event that the size of the order has been 

increased and/or the price has been 

changed, the order will be treated as a 

new order and will receive a new time 

priority. Currently, any modification to 

the size of an order, including a 

decrease in the size, is treated as a new 

order with a new time priority. 

Allowing Users 5 to decrease the size of 

an order and retain priority follows 

precedent established by other market 

centers and will not impact the 

Exchange’s disseminated best priced 

bid-offer market. This change allows 

Users to more effectively account for 

portfolio position changes while 

retaining priority in the NYSE Arca 

book.6

2. Statutory Basis 

The proposed rule change is 

consistent with Section 6(b) 7 of the 

Securities Exchange Act of 1934 (the 

‘‘Exchange Act’’), in general, and 

furthers the objectives of Section 

6(b)(5) 8 in particular in that it 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 

facilitating transactions in securities, 

and to remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system. The proposed rule change 

allows Users to decrement the size of an 

order while still retaining priority in the 

NYSE Arca Book. 

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 

The Exchange has filed the proposed 

rule change pursuant to Section 

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

19b–4(f)(6) thereunder.10 Because the 

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 

prior to 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, the 

proposed rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act 11 and Rule 19b–4(f)(6)(iii) 

thereunder.12

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission may summarily abrogate 

mstockstill on PROD1PC66 with NOTICES