Document ID: SEC-2011-2032-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX PHLX LLC
Posted Date: 2011-12-28T05:00Z

[Federal Register Volume 76, Number 249 (Wednesday, December 28, 2011)]
[Notices]
[Pages 81552-81553]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-33246]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66022; File No. SR-Phlx-2011-136]

 Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Order 
Approving Proposed Rule Change Relating To Transfer of Exchange House 
Accounts

December 21, 2011.

I. Introduction

    On October 19, 2011, NASDAQ OMX PHLX LLC (``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 codify current 
Exchange policy with respect to the transfer of Exchange house 
accounts. The proposed rule change was published in the Federal 
Register on November 8, 2011.\3\ The Commission received no comments on 
the proposal. This order approves the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 65667 (November 2, 
2011), 76 FR 69316.
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II. Description of Proposal

    The Exchange proposes to adopt new Exchange Rule 912, Transfer of 
Accounts. The proposed rule would provide the process when an Exchange 
member or member organization transfers Exchange house accounts to 
another Exchange member or member organization. According to the 
Exchange, the house accounts are assigned by the Exchange's Membership 
Department and are not customer accounts. Rather, these Exchange house 
accounts are used by Exchange members or member organizations to 
transact business on the Exchange.
    Specifically, the proposed rule would provide that transferor and 
transferee members or member organizations must notify the Exchange's 
Membership Department in writing of the intent to transfer Exchange 
house account(s) in accordance with the rules prescribed by the 
Membership Department. Further, the transferor and transferee members 
or member organizations must execute and provide a Letter of Indemnity 
to the Exchange. According to the Exchange, the Letter of Indemnity is 
a standard form that the Exchange requires members to complete for 
transfers of Exchange house accounts.

III. Commission Findings and Discussion

    After careful review, the Commission finds that the proposed rule 
change is consistent with the requirements of Section 6 of the Act,\4\ 
and the rules and regulations thereunder applicable to a national 
securities exchange. In particular, the Commission finds that the 
proposed rule change is consistent with Section 6(b)(5) of the Act,\5\ 
which requires, among other things, that the rules of the exchange be 
designed to prevent fraudulent and manipulative acts and practices, to 
promote just and equitable principles of trade, 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.\6\
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    \4\ 15 U.S.C. 78f.
    \5\ 15 U.S.C. 78f(b)(5).
    \6\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. 15 U.S.C. 78c(f).
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    The Exchange's proposal would govern how an Exchange member or 
member organization would transfer Exchange house accounts. The 
Commission believes that the proposal clarifies to members and member 
organizations the process required to transfer such accounts. In 
requiring that members or member organizations execute a Letter of 
Indemnity in connection with a transfer of accounts, the proposed rule 
also delineates which firm has responsibility for liabilities 
associated with those accounts. Accordingly, the Commission finds that 
the proposal would promote just and equitable principles of trade and 
remove impediments to and perfect the mechanism of a free and open 
market, and is consistent with the requirements of the Act.\7\
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    \7\ The Commission notes, however, that this order does not 
approve any prior transfer of Exchange house accounts that may have 
been inconsistent with the approved rules of the Exchange then in 
effect.
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IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\8\ that the

[[Page 81553]]

proposed rule change (SR-Phlx-2011-136) be, and it hereby is, approved.
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    \8\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2011-33246 Filed 12-27-11; 8:45 am]
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