32014 Federal Register / Vol. 74, No. 127 / Monday, July 6, 2009 / Notices 

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). 

5 15 U.S.C. 78f. 

6 15 U.S.C. 78f(b)(5). 

7See SR–NASD–2003–039. 

The information collection 

requirements imposed by Rule 11a–2 

are mandatory. Responses to the 

collection of information will not be 

kept confidential. An agency may not 

conduct or sponsor, and a person is not 

required to respond to, a collection of 

information unless it displays a 

currently valid control number. 

Please direct general comments 

regarding the above information to the 

following persons: (i) Desk Officer for 

the Securities and Exchange 

Commission, Office of Management and 

Budget, Room 10102, New Executive 

Office Building, Washington, DC 20503 

or send an e-mail to Shagufta Ahmed at 

Shagufta_Ahmed@omb.eop.gov; and (ii) 

Charles Boucher, Director/CIO, 

Securities and Exchange Commission, 

C/O Shirley Martinson, 6432 General 

Green Way, Alexandria, VA 22312; or 

send an e-mail to: 

PRA_Mailbox@sec.gov. Comments must 

be submitted to OMB within 30 days of 

this notice. 

Dated: June 29, 2009. 

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. E9–15722 Filed 7–2–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60182; File No. SR– 

NASDAQ–2009–057] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Provide an 

Optional Anti-Internalization 

Functionality 

June 26, 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 23, 

2009, The NASDAQ Stock Market LLC 

(‘‘NASDAQ’’ or ‘‘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. NASDAQ 

filed the proposed rule change as a 

‘‘non-controversial’’ proposed rule 

change 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 

NASDAQ proposes a rule change to 

provide an optional anti-internalization 

functionality. 

The text of the proposed rule change 

is below. Proposed new language is 

underlined and proposed deletions are 

in brackets. 

* * * * * 

4757. Book Processing 

(a) System orders shall be executed 

through the Nasdaq Book Process set 

forth below: 

(1)–(3) No Change. 

(4) Exception: Anti-Internalization— 

Market participants may direct that 

quotes/orders entered into the System 

not execute against quotes/orders 

entered under the same MPID. In such 

a case, the later entered of the quote/ 

orders will be cancelled back to the 

entering party. 

* * * * * 

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 provide a 

voluntary anti-internalization function. 

Under the proposal, market participants 

entering quotes/orders under a specific 

market participant identifier (‘‘MPID’’) 

may voluntarily direct that they not 

execute against other quotes/orders 

entered into the System under the same 

MPID. 

Under the proposal, the System, if 

requested, will not execute quote/orders 

entered under the same MPID against 

each other. Instead, the System will 

execute against all eligible trading 

interest of other market participants, in 

time-priority, up to the point where it 

would interact with a resting order 

having the MPID and thereupon 

immediately cancel any remaining 

portion of the most recently entered of 

the two same-MPID quote/orders to its 

entering party. 

Anti-internalization functionality is 

designed to assist market participants in 

complying with certain rules and 

regulations of the Employee Retirement 

Income Security Act (‘‘ERISA’’) that 

preclude and/or limit managing brokerdealers of such accounts from trading as 

principal with orders generated for 

those accounts. It can also assist market 

participants in reducing execution fees 

potentially resulting from the 

interaction of executable buy and sell 

trading interest from the same firm. 

Nasdaq notes that use of the 

functionality does not relieve or 

otherwise modify the duty of best 

execution owed to orders received from 

public customers. As such, market 

participants using anti-internalization 

functionality will need to take 

appropriate steps to ensure that public 

customer orders that do not execute 

because of the use of anti-internalization 

functionality ultimately receive the 

same execution price (or better) they 

would have originally obtained if 

execution of the order was not inhibited 

by the functionality. 

2. Statutory Basis 

NASDAQ believes that the proposed 

rule change is consistent with the 

provisions of Section 6 of the Act,5 in 

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

Act,6 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. Nasdaq notes that 

similar functionality has previously 

approved for earlier Nasdaq market 

systems.7

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. 

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Federal Register / Vol. 74, No. 127 / Monday, July 6, 2009 / Notices 32015 

8 15 U.S.C. 78s(b)(3)(A). 

9 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

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

provide the Commission with 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 fulfilled this requirement. 

10For 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). 

11 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Amendment No. 1 is a partial amendment that 

makes four non-substantive, technical changes to 

the rule text submitted as Exhibit 5 to SR–CBOE– 

2009–037. 

4Amendment No. 2 is a partial amendment that 

makes corrections to the description of the changes 

submitted in Amendment No. 1. 

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 foregoing proposed rule 

change: (1) Does not significantly affect 

the protection of investors or the public 

interest; (2) does not impose any 

significant burden on competition; and 

(3) by its terms does not become 

operative for 30 days after the date of 

this 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 8 and Rule 

19b–4(f)(6) thereunder.9

A proposed rule change filed under 

Rule 19b–4(f)(6) normally does not 

become operative for 30 days after the 

date of filing. However, Rule 19b– 

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

designate a shorter time if such action 

is consistent with the protection of 

investors and the public interest. The 

Exchange requests that the Commission 

waive the 30-day operative delay so that 

the benefits of this functionality to 

NASDAQ market participants expected 

from the rule change will not be 

delayed. The Commission believes that 

waiving the 30-day operative delay to 

make this functionality available 

without delay is consistent with the 

protection of investors and the public 

interest. Therefore, the Commission 

designates the proposal operative upon 

filing.10

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–2009–057 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–2009–057. 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 NASDAQ. 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–2009–057 and 

should be submitted on or before July 

27, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. E9–15740 Filed 7–2–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60177; File No. SR–CBOE– 

2009–037] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing of 

Proposed Rule Change, as Modified by 

Amendment Nos. 1 and 2 Thereto, To 

Amend Its Minor Rule Violation Plan 

June 25, 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 4, 

2009, the Chicago Board Options 

Exchange, Incorporated (‘‘Exchange’’ or 

‘‘CBOE’’) filed with the Securities and 

Exchange Commission (the 

‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the Exchange. The 

Exchange filed Amendment No. 1 to the 

proposed rule change on June 17, 2009.3

Subsequently, on June 23, 2009, the 

Exchange filed Amendment No. 2.4 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 Chicago Board Options Exchange, 

Incorporated (‘‘CBOE’’ or ‘‘Exchange’’) 

proposes to amend CBOE Rule 17.50— 

Imposition of Fines for Minor Rule 

Violations to (i) increase and strengthen 

the sanctions imposed under CBOE’s 

Minor Rule Violation Plan; (ii) 

incorporate additional violations into 

CBOE’s Minor Rule Violation Plan; (iii) 

delete obsolete or duplicative sections 

of the rule; and (iv) make various nonsubstantive technical changes to the 

rule. The text of the proposed rule 

change is available on the Exchange’s 

mstockstill on PROD1PC66 with NOTICES