Document ID: SEC-2010-1900-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX PHLX LLC
Posted Date: 2010-12-15T05:00Z

[Federal Register Volume 75, Number 240 (Wednesday, December 15, 2010)]
[Notices]
[Pages 78296-78297]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-31454]

[[Page 78296]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63492; File No. SR-Phlx-2010-172]

Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by NASDAQ OMX PHLX LLC Relating 
To Changing the Starting Time for NASDAQ OMX PSX

December 9, 2010.
    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 December 3, 2010, NASDAQ OMX PHLX LLC (``Phlx'' 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. The Commission 
is publishing this notice to solicit comments on the proposed rule 
change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend certain rules of NASDAQ OMX PSX, the 
Exchange's equity trading facility (``PSX''), to change the starting 
time from 9 a.m. Eastern Time (``ET'') to 8 a.m. ET. The Exchange 
proposes to amend provisions of PSX Rules 3100, 3217, 3301, 3302 and 
3306 to reflect the proposed amended starting time.
    The text of the proposed rule change is available on the Exchange's 
Web site at http://www.nasdaqtrader.com/micro.aspx?id=PHLXRulefilings, 
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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of the proposed rule change is to amend certain rules 
of PSX to change the starting time from 9 a.m. ET to 8 a.m. ET. More 
specifically, the Exchange proposes to amend the following PSX rules in 
the following manner:
    i. PSX Rule 3100 (b)(4)(B) to reflect that the trading session 
begins at 8 a.m. instead of 9 a.m.
    ii. PSX Rule 3217 to reflect that the normal business hours for the 
automated system for order execution and trade reporting owned and 
operated by the Exchange for the purpose of trading securities on PSX 
(``System'') operates from 8 a.m. ET instead of 9 a.m. ET.
    iii. PSX Rule 3301(h)(1) to reflect that System Hours Immediate or 
Cancel \3\ orders must be will be available for entry and execution 
from 8 a.m. ET instead of 9 a.m. ET.
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    \3\ ``System Hours Immediate or Cancel'' shall mean, for orders 
so designated, that if after entry into the System the order (or a 
portion thereof) is not marketable, the order (or unexecuted portion 
thereof) shall be canceled and returned to the entering Participant. 
See PSX Rule 3301(h)(1).
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    iv. PSX Rule 3301(h)(2) to reflect that System Hours Day \4\ orders 
must remain available for potential display and/or execution from 8 
a.m. ET instead of 9 a.m. ET.
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    \4\ ``System Hours Day'' shall mean, for orders so designated, 
that if after entry into the System, the order is not fully 
executed, the order (or the unexecuted portion thereof) shall remain 
available for potential display and/or execution from 9 a.m. until 5 
p.m. Eastern Time on the day it was submitted unless cancelled by 
the entering party. See PSX Rule 3301(h)(2).
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    v. PSX Rule 3301(h)(4) to reflect that System Hours Expire Time \5\ 
orders must remain for entry and execution from 8 a.m. ET instead of 9 
a.m. ET.
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    \5\ ``System Hours Expire Time'' or ``SHEX'' shall mean, for 
orders so designated, that if after entry into the System, the order 
is not fully executed, the order (or the unexecuted portion thereof) 
shall remain available for potential display and/or execution for 
the amount of time specified by the entering Participant (up to 5 
p.m. on the day entered) unless canceled by the entering 
Participant. See PSX Rule 3301(h)(4).
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    vi. PSX Rule 3301(h)(8) to reflect that ``good-til-market close'' 
\6\ orders must be available for entry and potential execution from 8 
a.m. ET instead of 9 a.m. ET.
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    \6\ ``Good-til-market close'' shall mean for orders so 
designated, that if after entry into the System, the order is not 
fully executed, the order (or unexecuted portion thereof) shall 
remain available for potential display and/or execution until 
cancelled by the entering party, or until 4 p.m., after which it 
shall be returned to the entering party. See PSX Rule 3301(h)(8).
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    vii. PSX Rule 3302 to reflect that the System will be opened for 
order entry at 8 a.m. instead of 9 a.m.
    viii. PSX Rule 3306(a)(3) to reflect that orders can be entered 
into the System (or previously entered orders cancelled) from 8 a.m. ET 
instead of 9 a.m. ET.
    PSX is a fully electronic system that accommodates diverse business 
models and trading preferences. PSX utilizes technology to aggregate 
and display liquidity and make it available for execution of orders. 
PSX is proposing to expand its operational hours to open the System 
earlier so that firms can enter orders and execute beginning at 8 a.m. 
rather than 9 a.m.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\7\ in general, and with 
Sections 6(b)(1) and 6(b)(5) of the Act,\8\ in particular, in that the 
proposal enables the Exchange to be so organized as to have the 
capacity to be able to carry out the purposes of the Act and to comply 
with and enforce compliance by members, member organizations, and 
persons associated with members and member organizations with 
provisions of the Act, the rules and regulations thereunder, and the 
rules of the Exchange. The proposal is also consistent with Section 6 
of the Act 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. An earlier open will enhance 
the national market system by providing market participants increased 
opportunity to more effectively carryout the execution of orders in the 
manner addressed by PSX rules. Such improvements will enhance the 
protection of investors and the public interest.
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    \7\ 15 U.S.C. 78f.
    \8\ 15 U.S.C. 78f(b)(1), (5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
result in any burden on competition not

[[Page 78297]]

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

    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 after the date of the filing, or such 
shorter time as the Commission may designate, it has become effective 
pursuant to Section 19(b)(3)(A) of the Exchange Act \9\ and Rule 19b-
4(f)(6) \10\ thereunder.
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 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 Exchange has satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) normally may 
not become operative prior to 30 days after the date of filing.\11\ 
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.\12\ The Exchange has requested that 
the Commission waive the 30-day operative delay. The Commission notes 
that Phlx's proposal is substantially similar to the rules of other 
national securities exchanges and does not raise any new substantive 
issues. In addition, Phlx notes that other exchanges open their markets 
for entry of orders prior to 9 a.m.,\13\ and, in order to be 
competitive, the Exchange would like to extend the same opportunity to 
its market participants. The Exchange would like to implement this 
proposed rule on December 13, 2010. Based on the foregoing, the 
Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest and 
hereby designates the proposal operative upon filing.\14\
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    \11\ 17 CFR 240.19b-4(f)(6)(iii).
    \12\ Id.
    \13\ See The NASDAQ Stock Market LLC Rule 4617 (opens at 7 a.m. 
EST). See also NASDAQ OMX BX Rule 4617 (opens at 8 a.m. EST), and 
NYSE Arca Equities Rule 7.34 (opens at 1 a.m. Pacific Time).
    \14\ For the 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).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend 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. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule should be approved or 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 rule-comments@sec.gov. Please include 
File Number SR-Phlx-2010-172 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-2010-172. 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 Web site viewing and printing 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 available publicly. All submissions 
should refer to File Number SR-Phlx-2010-172 and should be submitted on 
or before January 5, 2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-31454 Filed 12-14-10; 8:45 am]
BILLING CODE 8011-01-P