Document ID: SEC-2009-1311-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Regarding Audit Trail Information
Posted Date: 2009-09-15T04:00Z

[Federal Register: September 15, 2009 (Volume 74, Number 177)]
[Notices]               
[Page 47300-47302]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15se09-142]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60633; File No. SR-BX-2009-052]

 
Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change Regarding 
Audit Trail Information

September 8, 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 25, 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 Exchange filed the proposed 
rule change pursuant to Section 19(b)(3)(A) of the Act,\3\ and Rule 
19b-4(f)(6) thereunder,\4\ which renders the proposal effective upon 
filing with the Commission. The Commission is publishing this notice to 
solicit comments on the proposed rule from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6).
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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 Chapter V, Section 15 (Audit Trail) 
of the Rules of the Boston Options Exchange Group, LLC (``BOX'') to 
clarify the information that the BOX Rules currently require to be 
submitted to the BOX order entry system. 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://

[[Page 47301]]

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.

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

1. Purpose
    The purpose of this proposal is to make changes to BOX Rules 
Chapter V, Section 15(b) to clarify the information required for orders 
submitted to the BOX Trading Host. The proposed changes will result in 
the modification of one (1) information item and the clarification 
regarding certain information items in the Supplementary Material.
    The item to be modified is account identification.\5\ The proposed 
change will allow Participants to align the terms utilized in their 
system protocols to the requirements and language of BOX Rules Chapter 
V, Section 15(b). There has been some uncertainty regarding the 
information required under the categories ``customer identification'' 
and ``account identification''. Therefore, the proposed change from 
``account identification'' to ``account type'' will clarify the 
details, without altering the scope, which the Exchange is requiring by 
using the same term provided in technical system guides. As a result of 
enhancements to BOX systems, the ``type'' of account, or sometimes 
referred to as ``customer type'' (i.e. Public Customer, Market Maker, 
etc.), is represented by one of several particular order origin codes, 
where the order origin code represents a separate and distinct account 
type.\6\ These order origin codes must be submitted to the BOX order 
entry system for each order and are used by the Trading Host.
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    \5\ See BOX Rules Chapter V, Section 15(b)(ix).
    \6\ See BOXR Regulatory Circular 2007-02.
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    The Exchange proposes to add Supplementary Material to Section 15 
to specify that the identity of the individual/terminal completing the 
order ticket and customer identification \7\ (the specific customer or 
account number) are not required to be submitted into the order entry 
system. These are not details that the Exchange currently routinely 
utilizes for any trading or surveillance purpose and thus are not 
submitted in the order entry system. BOX Rules Chapter V, Section 
1(b)(iv) continues to require that Participants must maintain 
procedures and controls to monitor and supervise the entry of orders. 
Further, this type of specific information should be maintained as part 
of the Participant's books and records requirements, and if requested, 
must be provided to the Exchange.\8\
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    \7\ See BOX Rules Chapter V, Section 15(b)(vii) and (viii).
    \8\ See BOX Rules Chapter VIII (Records, Reports and Audits).
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    This proposed change will not result in a decrease in the useful 
information BOX currently gathers about an order. BOX will continue to 
gather all details essential to an order submitted to BOX and to allow 
BOX to properly prioritize and match orders and report resulting 
transactions to the Options Clearing Corporation (``OCC''). In fact, 
system enhancements have improved the Exchange's ability to surveil BOX 
trading and Participant compliance with BOX Rules.
    Participants will still be required to submit orders in a manner 
prescribed by the Exchange.
2. Basis
    The Exchange believes that the proposal is consistent with the 
requirements of Section 6(b) of the Act,\9\ in general, and Section 
6(b)(5) of the Act,\10\ 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 items and 
language that this proposal seeks to modify will not affect BOX's 
ability to prioritize and match orders nor the reporting of executions 
to the OCC. Additionally, the renaming of terms will align them with 
the updated BOX system protocol.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 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.

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

    This proposed rule change is filed pursuant to paragraph (A) of 
section 19(b)(3) of the Exchange Act \11\ and Rule 19b-4(f)(6) 
thereunder.\12\ This proposed rule change does not significantly affect 
the protection of investors or the public interest, does not impose any 
significant burden on competition, and, by its terms, does not become 
operative for 30 days after the date of the filing, or such shorter 
time as the Commission may designate if consistent with the protection 
of investors and the public interest. \13\ At any time within 60 days 
of the filing of the proposed rule change, the Commission may summarily 
abrogate 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.
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(6).
    \13\ As required under Rule 19b-4(f)(6)(iii), the Exchange 
provided the Commission with written notice of its intent to file 
the proposed rule change at least five business days before doing 
so.
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposal 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-BX-2009-052 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary,

[[Page 47302]]

Securities and Exchange Commission, 100 F Street, NE., Washington, DC 
20549-1090.

All submissions should refer to File Number SR-BX-2009-052. 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 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-BX-2009-052 and should be 
submitted on or before October 6, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-22107 Filed 9-14-09; 8:45 am]

BILLING CODE 8010-01-P