Federal Register / Vol. 74, No. 112 / Friday, June 12, 2009 / Notices 28083 

10 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3AUTOM is the Exchange’s electronic order 

delivery, routing, execution and reporting system, 

which provides for the automatic entry and routing 

of equity option and index option orders to the 

Exchange trading floor. See Exchange Rule 1080. 

See also proposed rule change SR–Phlx–2009–32 

which proposes to amend Rule 1080 to state, 

‘‘AUTOM and AUTO–X were replaced by the Phlx 

XL System, such that references to both terms refer 

to Phlx XL.’’ Therefore, in light of proposed rule 

change SR–Phlx–2009–32, references throughout 

this rule filing to AUTOM-delivered orders would 

be referenced as electronically delivered orders 

upon the approval of SR–Phlx–2009–32. 

4A cancel-replacement order is a contingency 

order consisting of two or more parts which require 

the immediate cancellation of a previously received 

order prior to the replacement of a new order with 

new terms and conditions. If the previously placed 

order is already filled partially or in its entirety the 

replacement order is automatically canceled or 

reduced by such number. See Exchange Rule 

1066(c)(7). 

5See Securities Exchange Act Release Nos. 53226 

(February 3, 2006), 71 FR 7602 (February 13, 2006) 

(SR–Phlx–2005–92); and 53670 (April 18, 2006), 71 

FR 21087 (April 24, 2006) (SR–Phlx–2006–21). 

6A Complex Order is composed of two or more 

option components and is priced as a single order 

(a ‘‘Complex Order Strategy’’) on a net debit or net 

credit basis. 

7See e.g. Exchange Rule 1080(b)(i)(A) ‘‘* * * is 

any order entered on behalf of a public customer, 

and does not include any order entered for the 

account of a broker-dealer, or any account in which 

a broker-dealer or an associated person of a brokerdealer has any direct or indirect interest.’’ 

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 MSRB. 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–MSRB–2009–07 and should 

be submitted on or before July 6, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–13810 Filed 6–11–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60046; File No. SR–Phlx– 

–2009–44] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX, Inc.; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to the 

Cancellation Fee 

June 4, 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 1, 

2009, NASDAQ OMX PHLX, Inc. 

(‘‘Phlx’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘Commission’’) the proposed 

rule change as described in Items I, II, 

and III 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: (i) Increase 

the Cancellation Fee from $1.10 per 

order to $2.10 per order; (ii) modify the 

Cancellation Fee by limiting its 

applicability to cancelled AUTOMdelivered customer orders instead of all 

cancelled AUTOM-delivered orders; 

and (iii) specify the types of order 

activity that are exempt from the 

Cancellation Fee. The Exchange also 

proposes to amend an endnote to reflect 

recently approved Exchange By-Laws 

and a Rule. 

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 amend the Cancellation Fee 

to assist the Exchange in recouping 

costs associated with a large number of 

order cancellations. Specifically, the 

costs arise from increased bandwidth 

and capacity concerns related to 

increased message traffic. 

The Exchange proposes to increase 

the Cancellation Fee from $1.10 per 

order for each cancelled AUTOMdelivered 3 order in excess of the 

number of orders executed on the 

Exchange by a member organization in 

a given month to $2.10 per order. The 

Exchange believes this increase will 

cover costs to the Exchange associated 

with system congestion resulting from a 

rising number of cancellation orders. 

Currently, the Exchange assesses a 

Cancellation Fee of $ 1.10 per order on 

member organizations for each 

cancelled AUTOM-delivered order in 

excess of the number of orders executed 

on the Exchange by that member 

organization in a given month. The 

Exchange calculates the Cancellation 

Fee by aggregating all orders and 

cancels received by the Exchange and 

totaling those orders by member 

organization. At least 500 cancellations 

must be made in a given month by a 

member organization in order for a 

member organization to be assessed the 

Cancellation Fee. The Cancellation Fee 

is not assessed in a month in which 

fewer than 500 AUTOM-delivered 

orders are cancelled. Simple cancels 

and cancel-replacement orders are the 

types of orders that are counted when 

calculating the number of AUTOMdelivered orders.4 Also, pre-market 

cancellations 5 are not included in the 

calculation of the Cancellation Fee as 

well as Complex Orders 6 that are 

submitted electronically. 

The Exchange proposes to modify the 

Cancellation Fee to limit its 

applicability to cancelled AUTOMdelivered customer 7 orders instead of 

all cancelled AUTOM-delivered orders. 

This proposal would assess the $2.10 

28084 Federal Register / Vol. 74, No. 112 / Friday, June 12, 2009 / Notices 

8An Immediate-or-Cancel (IOC) order is a limit 

order that is to be executed in whole or in part upon 

receipt. Any portion not so executed shall be 

cancelled. 

9The Complex Order exemption is currently 

specified in the Fee Schedule. 

10See Securities Exchange Act Release No. 59924 

(May 14, 2009), 74 FR 23759 (May 20, 2009) (SR– 

Phlx–2009–23). 

11See Securities Exchange Act Release No. 59794 

(April 20, 2009), 74 FR 18761 (April 24, 2009) (SR– 

Phlx–2009–17). 

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

13 15 U.S.C. 78f(b)(4). 

14 15 U.S.C. 78s(b)(3)(A)(ii). 

15 17 CFR 240.19b–4(f)(2). 

proposed Cancellation Fee on cancelled 

customer orders that are in excess of the 

number of customer orders executed on 

the Exchange by a member organization 

in a given month. The Exchange 

believes that by modifying the 

cancellation calculation to customer 

orders, the Exchange would be able to 

fairly allocate costs among members 

according to system use. 

The Exchange also proposes to amend 

the types of order activity that are 

exempt from the Cancellation Fee. As 

previously stated, currently the 

Cancellation Fee is not assessed in a 

month in which fewer than 500 

AUTOM-delivered orders are cancelled; 

only simple cancels and cancelreplacement orders are the types of 

orders that are counted when 

calculating the number of AUTOMdelivered orders. Also, currently premarket cancellations and Complex 

Orders that are submitted electronically 

are not included in the calculation of 

the Cancellation Fee. 

The Exchange proposes to continue to 

exempt fewer than 500 AUTOMdelivered orders that are cancelled, but 

proposes to amend that provision to 

state that it will exempt fewer than 500 

AUTOM-delivered customer orders that 

are cancelled in a month. Additionally, 

the Exchange proposes to exempt 

unfilled Immediate-or-Cancel 8 customer 

orders and cancelled customer orders 

that improved the Exchange’s prevailing 

bid or offer (PBBO) market at the time 

the customer orders were received by 

the Exchange. The Exchange believes 

that these types of order activity should 

be exempt from the Cancellation Fee 

because the activity does not contribute 

excessively to system congestion. The 

pre-market cancellations and Complex 

Orders that are submitted electronically 

will continue to not be included in the 

calculation of the Cancellation Fee. 

As previously stated, the Exchange 

currently exempts these types of order 

activities. However, the Exchange 

proposes to specifically mention the 

pre-market cancellation exemption in 

the Fee Schedule by noting that premarket cancellations are exempt.9 The 

Exchange inadvertently excluded such 

language from the Fee Schedule in the 

past and believes that the addition of 

such language will clarify the Fee 

Schedule. Similarly, the Exchange still 

believes that the pre-market cancellation 

and Complex Order activity do not 

excessively contribute to increased 

order flow traffic. 

Finally, the Exchange proposes to 

amend endnote 70 to reflect the recently 

approved changes to proposed rules SR– 

Phlx–2009–23 10 and SR–Phlx–2009– 

17,11 which amended Exchange By-Law 

Article VI, Sections 11–1 and 11–3 and 

Exchange Rule 960.9 to rename certain 

standing committees and eliminate 

reference to a Hearing Officer. These 

proposed amendments to endnote 70 

will conform the endnote to the 

Exchange’s current By-Laws and Rules. 

2. Statutory Basis 

The Exchange believes that its 

proposal to amend its schedule of fees 

is consistent with Section 6(b) of the 

Act 12 in general, and furthers the 

objectives of Section 6(b)(4) of the Act 13

in particular, in that it is an equitable 

allocation of reasonable fees and other 

charges among Exchange members. The 

Exchange believes that the proposed 

amendments to the Cancellation Fee 

will continue to fairly allocate costs 

among members according to system 

use as well as ease system congestion. 

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 14 and 

paragraph (f)(2) of Rule 19b–4 15

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–2009–44 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–2009–44. 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–Phlx–2009–44 and should 

be submitted on or before July 6, 2009. 

Federal Register / Vol. 74, No. 112 / Friday, June 12, 2009 / Notices 28085 

16 17 CFR 200.30–3(a)(12). 

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

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

3 17 CFR 240.19b–4(f)(4). 

4The Commission has modified the text of the 

summaries prepared by DTC. 

5For a description of Profile, see Securities 

Exchange Act Release No. 41862 (September 10, 

1999), 64 FR 51162 (September 21, 1999) (order 

approving implementation of Profile). 

6The Screen Indemnity protects, among others, 

the party delivering the share position from liability 

in connection with the transaction arising from a 

User’s breach of the representation of authority and 

consent to initiate the transaction. For a broader 

description of the Screen Indemnity, see Securities 

Exchange Act Release No. 42704 (April 19, 2000), 

65 FR 24242 (April 25, 2000) (order approving 

modification of Profile to incorporate use of the 

Screen Indemnity). 

7Securities Exchange Act Release No. 42422 

(September 14, 2005), 70 FR 55196 (September 20, 

2005). 

8Under PSP, each user of Profile that agrees to 

the Screen Indemnity must procure a surety bond 

to back its obligations under such indemnity 

(‘‘Surety Bond’’). Participation in PSP requires the 

payment of an annual premium of $3,150 to a 

surety provider and a DTC administration fee of 

$250. The current PSP surety provider provides for 

a coverage limit of $3 million per transaction with 

an annual aggregate limit of $6 million. The 

Commission approved a rule filing establishing an 

alternate to PSP in June 2008 (‘‘PSP II’’). Securities 

Exchange Act Release No. 58042 (June 26, 2008), 73 

FR 39067 (July 8, 2008). 

9 15 U.S.C. 78q–1. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–13809 Filed 6–11–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60036; File No. SR–DTC– 

2009–09] 

Self-Regulatory Organizations; The 

Depository Trust Company; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Establish an 

Alternate Choice in DTC’s Profile 

Modification System Indemnity 

Insurance Program 

June 3, 2009. 

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

Securities Exchange Act of 1934 

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

May 11, 2009, The Depository Trust 

Company (‘‘DTC’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change described in Items I, II, and III 

below, which items have been prepared 

primarily by DTC. DTC filed the 

proposal pursuant to Section 

19(b)(3)(A)(iii) of the Act 2 and Rule 

19b–4(f)(4) 3 thereunder so that the 

proposal was effective upon filing with 

the Commission. The Commission is 

publishing this notice to solicit 

comments on the rule change from 

interested parties. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The purpose of the rule change is to 

establish an alternate choice in DTC’s 

Profile Modification System Indemnity 

Insurance Program. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

DTC 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. DTC has prepared 

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

and (C) below, of the most significant 

aspects of these statements.4

(A) Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

DTC’s Profile Modification System 

(‘‘Profile’’) is an electronic 

communication hub between transfer 

agents that participate in the Direct 

Registration System (‘‘DRS’’), which 

transfer agents are Limited Participants 

(‘‘Limited Participants’’) of DTC, and 

broker-dealers that participate in DRS, 

which broker-dealers are DTC 

Participants (‘‘Participants;’’ 

Participants together with Limited 

Participants are collectively referred to 

as ‘‘Users’’).5 Profile allows Participants 

to submit an investor’s instruction to 

move a share position from the 

investor’s DRS account at the transfer 

agent to the Participant’s account at 

DTC (‘‘Electronic Participant 

Instruction’’). Profile also allows 

Limited Participants to submit an 

investor’s instruction to move its share 

position from the Participant’s account 

at DTC to the DRS account at the 

transfer agent (‘‘Electronic Limited 

Participant Instruction;’’ Electronic 

Limited Participant Instruction and 

Electronic Participant Instruction are 

collectively referred to as ‘‘Electronic 

Instructions’’). A User submitting an 

Electronic Instruction through Profile is 

required to agree to a Participant 

Terminal System (‘‘PTS’’) screen 

indemnity (‘‘Screen Indemnity’’).6

On August 22, 2005, the Commission 

approved a rule filing establishing the 

DTC Profile Indemnity Insurance 

Program (‘‘PIP’’),7 on as an alternative to 

the existing DTC Profile Surety Program 

(‘‘PSP’’).8 Profile users who agree to the 

Screen Indemnity have the option to 

procure Profile Indemnity Insurance 

(‘‘Insurance’’) relating to a particular 

transaction according to the value of 

each individual securities transaction. 

The Insurance option provides a 

coverage limit of $25 million per 

transaction with an annual aggregate 

limit of $100 million. In addition to any 

pass-through fee from the insurer, DTC 

charges users participating in PIP an 

annual administration fee of $250 and a 

$27.50 per transaction fee. 

DTC is proposing to provide Profile 

users an option to procure insurance 

with a different coverage limit than that 

currently offered (‘‘PIP II’’). The 

coverage limit for PIP II will be $7.5 

million per transaction with an annual 

aggregate limit of $15 million. PIP II 

users will be required to pay an annual 

premium of $6,000 to an insurance 

provider and a DTC administration fee 

of $250. The intent of this program is to 

provide an alternative insurance option 

for Profile users with high volume and 

moderate value and also for contingency 

planning if a provider is no longer able 

to provide insurance or surety. Users 

will be permitted to participate with 

each provider but will continue to be 

required to select only one provider per 

Profile transaction. 

The insurance company issuing the 

insurance policy will either be a 

company selected by DTC as the 

administrator of such insurance 

program, or an insurance company 

selected by the User. If a User elects to 

use an insurance company other than 

the one DTC has selected, the insurance 

company selected must issue its 

insurance policy in a form consistent 

with the policy issued by the insurance 

company selected by DTC. 

The proposed rule change is 

consistent with Section 17A of the Act,9

as amended, because it modifies an 

existing service by establishing an 

alternate choice for Profile insurance 

users to provide a broader range of 

options to safeguard transactions 

processed within Profile. 

(B) Self-Regulatory Organization’s 

Statement on Burden on Competition 

DTC does not believe that the 

proposed rule change will have any 

impact or impose any burden on 

competition.