Document ID: SEC-2009-1264-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing of Proposed Rule Change To Amend the Grandfathered Rules of the Exchange
Posted Date: 2009-09-08T04:00Z

[Federal Register: September 8, 2009 (Volume 74, Number 172)]
[Notices]               
[Page 46288-46289]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08se09-152]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60591; File No. SR-BX-2009-048]

 
Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of 
Filing of Proposed Rule Change To Amend the Grandfathered Rules of the 
Exchange

August 31, 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 August 17, 2009, NASDAQ OMX BX, Inc. (the ``Exchange'') filed with 
the Securities and Exchange Commission (``Commission'') the proposed 
rule change as described in Items I, II and III below, which Items have 
been prepared by the Exchange. 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 the Grandfathered Rules of the 
Exchange. This proposal seeks to incorporate certain provisions of the 
former Constitution of the Boston Stock Exchange into the Grandfathered 
Rules. The text of the proposed rule change is available from the 
principal office of the Exchange, at the Commission's Public Reference 
Room and also on the Exchange's Internet Web site at http://
nasdaqomxbx.cchwallstreet.com/NASDAQOMXBX/Filings/.

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.

[[Page 46289]]

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

1. Purpose
    The NASDAQ OMX Group, Inc. acquired the Boston Stock Exchange in 
August 2008. In the order approving the acquisition, the Constitution 
of the Boston Stock Exchange was replaced with the By-Laws of the 
Exchange as amended.\3\ Thereafter, the Exchange adopted new, different 
rules for equities trading, the ``Equity Rules'' and the Rules, under 
the new Exchange, were renamed NASDAQ OMX BX [sic].\4\ In addition, the 
rules of the Exchange under its former name remained in effect. These 
rules, as amended subsequent to that acquisition, are entitled the 
``Grandfathered Rules.'' The Grandfathered Rules are operative to the 
extent that they apply to the Boston Options Exchange Group, LLC 
(``BOX'') and to Options Participants on the Exchange, and are to be 
read in conjunction with the Rules of the BOX.
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    \3\ Securities Exchange Act Release No. 58324 (August 7, 2008), 
73 FR 46936 (August 12, 2008) (SR-BSE-2008-02, -23, -25; SR-BSECC-
2008-01).
    \4\ Securities Exchange Act Release No. 34-59154 (December 28, 
2008), 73 FR 80468 (December 31, 2008) (SR-BSE-2008-48).
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    This proposal seeks to incorporate certain provisions of the former 
Constitution of the Boston Stock Exchange into the Grandfathered Rules. 
The provisions regard the following: (a) Participation (formerly 
Membership) rules, to supplement the By-Laws and the Grandfathered 
Rules to direct the Participants and prospective participants to 
Section 6(c) of the Securities and Exchange Act of 1934, as cited in 
the proposed rule text regarding the investigation and acceptance of an 
applicant; (b) Non-liability of the Exchange provision, to reinforce to 
Participants the ``non-liability'' of the Exchange for damages 
sustained from use of the facilities of the Exchange; (c) Insolvent 
Participants, to provide guidance for Insolvent Participants to notify 
the Exchange, of such insolvency and to state that the Exchange will 
notify the Commission of such insolvency; and (d) Exchange Inquiries to 
remind Participants that they may be subject to expulsion or suspension 
for failure to respond to an Exchange Inquiry.
    The Exchange is seeking retroactive application of this proposal to 
the date which the new By-Laws were approved by the Commission.\5\ 
These rules supplement the existing Grandfathered Rules and do not 
substantially alter the rules in their current format.
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    \5\ See supra note 3.
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2. Statutory Basis
    The Exchange believes that the proposal is consistent with the 
requirements of Section 6(b) of the Act,\6\ in general, and Section 
6(b)(5) of the Act,\7\ in particular, in that it 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 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 proposal will 
provide for the BOX Options Participants to follow the Rules as they 
existed at the time of the close.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 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 
result in any burden on competition that is not 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

    The Exchange has neither solicited nor received comments on the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    A. By order approve such proposed rule change, or
    B. Institute proceedings to determine whether the proposed rule 
change should be 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 Exchange 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-BX-2009-048 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-BX-2009-048. 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 the 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-BX-2009-048 and should be 
submitted on or before September 29, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
Florence E. Harmon,
Deputy Secretary.
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    \8\ 17 CFR 200.30-3(a)(12).
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[FR Doc. E9-21585 Filed 9-4-09; 8:45 am]

BILLING CODE 8010-01-P