Document ID: SEC-2009-1067-0001
Agency: sec
Document Type: Notice
Title: Joint Industry Plan; Chicago Board Options Exchange, Incorporated, International Securities Exchange, LLC, The NASDAQ Stock Market LLC, NASDAQ OMX BX, Inc., NASDAQ OMX PHLX, Inc., NYSE Amex LLC, and NYSE Arca, Inc.; Notice of Filing of Amendments to the Intermarket Options Linkage Plan To Withdraw From the Plan
Posted Date: 2009-07-28T04:00Z

[Federal Register: July 28, 2009 (Volume 74, Number 143)]
[Notices]               
[Page 37265-37266]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28jy09-78]                         

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60360; File No. 4-429]

 
Joint Industry Plan; Chicago Board Options Exchange, 
Incorporated, International Securities Exchange, LLC, The NASDAQ Stock 
Market LLC, NASDAQ OMX BX, Inc., NASDAQ OMX PHLX, Inc., NYSE Amex LLC, 
and NYSE Arca, Inc.; Notice of Filing of Amendments to the Intermarket 
Options Linkage Plan To Withdraw From the Plan

July 21, 2009.

I. Introduction

    Pursuant to Section 11A of the Securities Exchange Act of 1934 (the 
``Act'') \1\ and Rule 608 of Regulation NMS thereunder (``Rule 
608''),\2\ notice is hereby given that on June 25, 2009, June 25, 3009, 
July 2, 2009, July 2, 2009, July 7, 2009, July 17, 2009, July 20, 2009, 
NYSE Arca, Inc. (``NYSE Arca''), NYSE Amex, LLC (``NYSE Amex''), 
International Securities Exchange, LLC (``ISE''), Chicago Board Options 
Exchange, Incorporated (``CBOE''), NASDAQ OMX BX, Inc. (``BX''), NASDAQ 
OMX PHLX, Inc. (``Phlx''), and The NASDAQ Stock Market LLC (``Nasdaq'') 
(collectively, ``Participants'') \3\ respectively submitted to the 
Securities and Exchange Commission (``Commission'') amendments to the 
Plan for the Purpose of Creating and Operating an Intermarket Option 
Linkage (``Linkage Plan'') (``Amendments'').\4\ Each Amendment proposes 
to modify Section 4(a) of the Linkage Plan to delete the name of the 
submitting Participant. The Commission is publishing this notice to 
solicit comments from interested persons on the proposed Amendments to 
the Linkage Plan.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78k-1(a).
    \2\ 17 CFR 242.608.
    \3\ See letter from Peter G. Armstrong, NYSE Arca, to Elizabeth 
Murphy, Secretary, Commission, dated June 24, 2009; letter from 
Michael Babel, NYSE Amex, to Elizabeth Murphy, Secretary, 
Commission, dated June 24, 2009; letter from Michael J. Simon, ISE, 
to Elizabeth Murphy, Secretary, Commission, dated July 1, 2009; 
letter from Edward J. Joyce, CBOE, to Elizabeth Murphy, Secretary, 
Commission, dated July 1, 2009; letter from Maura A. Looney, 
Associate Vice President, BX, to Elizabeth Murphy, Secretary, 
Commission, dated July 6, 2009; letter from letter from Richard S. 
Rudolph, Assistant General Counsel, Phlx, to Elizabeth Murphy, 
Secretary, Commission, dated July 16, 2009; and letter from Jeffrey 
S. Davis, Vice President and Deputy General Counsel, Nasdaq, to 
Elizabeth Murphy, Secretary, Commission, dated July 17, 2009.
    \4\ On July 28, 2000, the Commission approved a national market 
system plan for the purpose of creating and operating an intermarket 
options market linkage proposed by the American Stock Exchange LLC 
(n/k/a Amex), CBOE, and ISE. See Securities Exchange Act Release No. 
43086 (July 28, 2000), 65 FR 48023 (August 4, 2000). Subsequently, 
Philadelphia Stock Exchange, Inc. (n/k/a Phlx), Pacific Exchange, 
Inc. (n/k/a NYSE Arca), Boston Stock Exchange, Inc. (n/k/a BX), and 
Nasdaq joined the Linkage Plan. See Securities Exchange Act Release 
Nos. 43573 (November 16, 2000), 65 FR 70851 (November 28, 2000); 
43574 (November 16, 2000), 65 FR 70850 (November 28, 2000); 49198 
(February 5, 2004), 69 FR 7029 (February 12, 2004); and 57545 (March 
21, 2008), 73 FR 16394 (March 27, 2008).
---------------------------------------------------------------------------

II. Description of the Proposed Amendments

    The purpose of each Amendment is for the Participant submitting 
such Amendment to withdraw from the Linkage Plan. Pursuant to Section 
4(d) of the Linkage Plan, a Participant may withdraw by: (i) Providing 
not less than 30 days' prior written notice to each of the other 
Participants and to The Options Clearing Corporation (``OCC,'' the 
facilities manager) of such intent to withdraw; and (ii) effecting an 
amendment to the Linkage Plan as specified in Section 5(c)(iii) of the 
Linkage Plan. In turn, Section 5(c)(iii) of the Linkage Plan states 
that a Participant can withdraw from the Linkage Plan by filing an 
amendment deleting its name in Section 4(a) of the Linkage Plan and 
submitting such amendment to the Commission for approval. The 
submitting Participant must state how it plans to accomplish, by 
alternate means, the goals of the Linkage Plan regarding limiting 
Trade-Throughs. The amendment is effective upon Commission approval.
    The Participants plan to accomplish the Linkage Plan's goals 
through membership in the Options Order Protection and Locked/Crossed 
Market Plan (``New Plan''). The Commission has published the New Plan 
for comment.\5\ The participants to the New Plan currently plan to 
begin implementing that plan on August 31st, subject to Commission 
approval. The New Plan contains a requirement that each participant 
establish, maintain and enforce written procedures and policies that 
are reasonably designed to prevent Trade-Throughs.\6\ The New Plan will 
accomplish this in a more efficient manner than the Linkage Plan. 
Specifically, the New Plan eliminates a central hub and addresses 
Trade-Through compliance through the use of intermarket sweep orders. 
This is based on the concepts of Regulation NMS, which, among other 
things, addresses trade-throughs in the equity market. The New Plan 
also requires its participants to conduct surveillance of their markets 
to ascertain the effectiveness of these policies and procedures.\7\ 
Finally, the New Plan contains provisions requiring its participants to 
establish, maintain and enforce written rules addressing locked and 
crossed markets.\8\ The Participants believe that the New Plan will 
fully accomplish the same goals of the Plan, including imposing limits 
on Trade-Throughs.
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 59647 (March 30, 
2009), 74 FR 15010 (April 2, 2009).
    \6\ Section 5(a)(i) of the New Plan.
    \7\ Section 5(a)(ii) of the New Plan.
    \8\ Section 6 of the New Plan.
---------------------------------------------------------------------------

III. Implementation of the Plan Amendment

    The proposed Amendments to the Linkage Plan will be effective upon 
approval by the Commission pursuant to Rule 608.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the Amendments to 
the Linkage Plan are 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 4-429 on the subject line.

[[Page 37266]]

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 4-429. 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 Amendments that are filed with the 
Commission, and all written communications relating to the Amendments 
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 Amendments also will be available for inspection and copying at 
the respective principal office of BX, CBOE, ISE, Nasdaq, Phlx, NYSE 
Amex, and NYSE Arca. 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 4-
429 and should be submitted on or before August 18, 2009.
---------------------------------------------------------------------------

    \9\ 17 CFR 200.30-3(a)(29).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-17880 Filed 7-27-09; 8:45 am]

BILLING CODE 8010-01-P