Document ID: SEC-2011-0208-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX PHLX LLC
Posted Date: 2011-02-15T05:00Z

[Federal Register Volume 76, Number 31 (Tuesday, February 15, 2011)]
[Notices]
[Pages 8798-8799]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-3314]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63873; File No. SR-Phlx-2011-16]

Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change Extending 
the Pilot Period To Receive Inbound Routes of Orders From Nasdaq 
Options Services

February 9, 2011.
    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 February 3, 2011, 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 Phlx. The Exchange has designated the proposed 
rule change as constituting a non-controversial rule change under Rule 
19b-4(f)(6) under the Act,\3\ 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    Phlx submits this proposed rule change to extend the pilot period 
of Phlx's prior approval to receive inbound routes of certain option 
orders from Nasdaq Options Services, LLC (``NOS'') through August 25, 
2011.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, Phlx 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. Phlx 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
    Currently, NOS is the approved outbound routing facility of The 
NASDAQ Stock Market LLC (``NASDAQ'') for options, providing outbound 
routing from The NASDAQ Option Market (``NOM'') to other market 
centers.\4\ Phlx also has been previously approved to receive inbound 
routes of certain option orders by NOS in its capacity as an order 
routing facility of NASDAQ for NOM on a pilot basis.\5\ The Exchange 
hereby seeks to extend the previously approved pilot period for such 
inbound routing (with the attendant obligations and conditions) for an 
additional 6 months through August 25, 2011.\6\
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    \4\ NOM Rule Chapter VI, Section 11; See Securities Exchange Act 
Release No. 57478 (March 12, 2008), 73 FR 14521 (March 18, 2008) 
(SR-NASDAQ-2007-004; SR-NASDAQ-2007-080).
    \5\ See Securities Exchange Act Release Nos. 58179 (July 17, 
2008), 73 FR 42874 (July 23, 2008) (SR-Phlx-2008-31); 61667 (March 
5, 2010), 75 FR 11964 (March 12, 2010) (SR-Phlx-2010-36); 61668 
(March 5, 2010), 75 FR 12323 (March 15, 2010) (SR-NASDAQ-2010-028).
    \6\ During this pilot period, the Exchange will file a separate 
proposal with the Commission seeking permanent approval of the Phlx 
and NOS routing relationship.
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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 
Section 6(b)(5) of the Act,\8\ 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. Specifically, 
the proposed rule change will allow the Exchange to continue receiving 
inbound routes of option orders from NOS acting in its capacity as a 
facility of NASDAQ for NOM, in a manner consistent with prior approvals 
and established protections. The Exchange believes that extending the 
previously approved pilot period for six months is of sufficient length 
to permit both the Exchange and the Commission to assess the impact of 
the Exchange's authority to receive direct inbound routes of option 
orders via NOS (including the attendant obligations and conditions).
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    \7\ 15 U.S.C. 78f.
    \8\ 15 U.S.C. 78f(b)(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 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act, as amended.

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 rule change does not: (1) Significantly 
affect the protection of investors or the public interest; (2) impose 
any significant burden on competition; and (3) become operative for 30 
days after the date of this filing, or such shorter time as the 
Commission may designate, it has become effective pursuant to Section 
19(b)(3)(A) of the Act \9\ and Rule 19b-4(f)(6) thereunder.\10\
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6).
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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-

[[Page 8799]]

4(f)(6)(iii) \12\ permits the Commission to designate a shorter time if 
such action is consistent with the protection of investors and the 
public interest. Phlx has requested that the Commission waive the 30-
day operative delay. Phlx believes that the proposed rule change does 
not significantly affect the protection of investors or the public 
interest because it seeks to extend for a limited period a currently 
operating pilot program so as to allow the Exchange and the Commission 
to assess whether to make the pilot permanent in accordance with its 
attendant obligations and conditions.\13\ The Commission believes that 
waiving the 30-day operative delay is consistent with the protection of 
investors and the public interest because such waiver would allow the 
pilot period to be extended without undue delay through August 25, 
2011. For this reason, the Commission designates the proposed rule 
change to be operative upon filing with the Commission.\14\
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    \11\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-
4(f)(6)(iii) requires that a self-regulatory organization submit to 
the Commission 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 satisfied this requirement.
    \12\ Id.
    \13\ See SR-Phlx-2011-16, Item 7.
    \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 such 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.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change, as amended, 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-2011-16 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-2011-16. 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 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 
Phlx. 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-2011-16 and should be submitted on or before March 8, 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).

Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-3314 Filed 2-14-11; 8:45 am]
BILLING CODE 8011-01-P