Document ID: SEC-2012-0327-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX PHLX LLC
Posted Date: 2012-02-27T05:00Z

[Federal Register Volume 77, Number 38 (Monday, February 27, 2012)]
[Notices]
[Page 11606]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-4403]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66430; File No. SR-Phlx-2011-178]

Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Order 
Approving Proposed Rule Change Relating to Stock Execution Clerks

February 21, 2012.
    On December 20, 2011, NASDAQ OMX PHLX LLC (``Exchange'') filed with 
the Securities and Exchange Commission (``Commission''), pursuant to 
Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'') \1\ 
and Rule 19b-4 thereunder,\2\ a proposed rule change to eliminate the 
stock execution clerk registration category from the Exchange's rules. 
The proposed rule change was published for comment in the Federal 
Register on January 9, 2012.\3\ The Commission received no comments on 
the proposal.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 66079 (January 3, 
2012), 77 FR 1099.
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    The purpose of the proposed rule change is to eliminate the 
category of stock execution clerk from the Exchange's rules. Exchange 
Rule 1090 currently defines a stock execution clerk as any clerk other 
than a specialist clerk on the Exchange trading floor who functions as 
an intermediary in a transaction (i) consummated on the Exchange; (ii) 
entered verbally for execution other than on the Exchange; or (iii) 
entered into a third party system designed to execute transactions 
other than on the Exchange.\4\ A stock execution clerk is intended to 
provide a service to Exchange members on the Options Floor by accepting 
orders for the purchase and sale of securities underlying options 
transactions. Once such orders are accepted, the stock execution clerk 
forwards such orders to the appropriate marketplace for execution. 
According to the Exchange, the transactions executed are typically 
hedging transactions in underlying stocks for Exchange specialists and 
Registered Options Traders.
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    \4\ See Exchange Rule 1090, Commentary .01(a).
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    The Exchange has represented that this registration capacity is 
outdated and no longer necessary. According to the Exchange, the 
function of a stock execution clerk has become largely automated, as 
transactions that were handled by stock execution clerks now take place 
off-floor and mostly occur electronically. As such, the type of 
business conducted by stock execution clerks is not conducted on the 
Exchange's trading floor today. The Exchange stated that there are not 
currently any registered stock execution clerks on the Exchange, and 
there have not been for some time.
    After careful review, the Commission finds that the proposed rule 
change is consistent with the requirements of the Act and the rules and 
regulations thereunder applicable to a national securities exchange \5\ 
and, in particular, the requirements of Section 6(b)(5) of the Act.\6\ 
Specifically, the Commission finds that the proposed rule change is 
designed to promote just and equitable principles of trade, 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.
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    \5\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
    \6\ 15 U.S.C. 78f(b)(5).
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    The proposal will eliminate the stock execution clerk registration 
category from the Exchange's rules. There are no clerks currently 
registered as a stock execution clerks on the Exchange's trading floor, 
and there have not been for some time. Given that there are currently 
no stock execution clerks registered with the Exchange, and that 
transactions that were previously handled by stock execution clerks now 
take place off-floor and mostly occur electronically, this registration 
category is no longer necessary. As such, deleting this category of 
clerks is reasonably designed to provide clarity to members, and to 
keep the Exchange's rules updated. For the foregoing reasons, the 
Commission believes that the proposed rule change is consistent with 
the Act.
    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\7\ that the proposed rule change (SR-Phlx-2011-178) be, and it 
hereby is, approved.
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    \7\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-4403 Filed 2-24-12; 8:45 am]
BILLING CODE 8011-01-P