[Federal Register Volume 75, Number 196 (Tuesday, October 12, 2010)]
[Notices]
[Pages 62621-62623]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-25495]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63036; File No. SR-Phlx-2010-131]
Self-Regulatory Organizations; NASDAQ OMX PHLX, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Update
Rule 1014
October 4, 2010.
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 September 27, 2010, NASDAQ OMX PHLX, Inc. (``Phlx'' or ``Exchange'')
filed with the Securities and Exchange Commission (``SEC'' or
``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 revise Rule 1014, Obligations and
Restrictions Applicable to Specialists and Registered Options Traders,
to delete provisions related to: (i) The obsolete terms AUTOM,
Streaming Quote Option, electronic interface, AUTO-X, Book Sweep and
Book Match; (ii) ``trading on Phlx XL''; (iii) the use of trading floor
tickets; and (iii) [sic] subparagraphs (g)(iii) and (iv), the New Unit/
New Option Enhanced Specialist Participation and New Product Enhanced
Specialist Participation, respectively. The Exchange also proposes to
make corollary changes to Floor Procedure Advice B-6, Priority of
Options Orders for Equity Options, Index Options and U.S. Dollar-
Settled Foreign Currency Options by Account Type, as explained further
below.
The text of the proposed rule change is available on the Exchange's
Web site at http://www.nasdaqtrader.com/micro.aspx?id=PHLXfilings, at
the principal office of the Exchange, at the Commission's Public
Reference Room, and on the Commission's Web site at http://www.sec.gov.
[[Page 62622]]
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 the proposed rule change is to clarify various
provisions in Rule 1014. Specifically, certain terms are obsolete,
given the Exchange's current use of the Phlx XL II System; these
include: Streaming Quote Options, electronic interface, AUTO-X, Book
Sweep and Book Match. Once the Exchange began enhancing its electronic
trading systems, these provisions became outdated. For the same reason,
references to ``trading on Phlx XL'' are both incorrect and
unnecessary; all trading occurs through Phlx XL II.\3\ The same changes
are proposed to Advice B-6 as well, which is part of the Exchange's
minor rule plan.\4\
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\3\ The Exchange intends to separately update the use of the
terms ``Phlx XL'' and ``Phlx XL II'' in various other rules in a
separate proposed rule change.
\4\ The Exchange's minor rule plan consists of options floor
procedure advices (``OFPAs'' or ``Advices'') with preset fines,
pursuant to Rule 19d-1(c) under the Act. 17 CFR 240.19d-1(c). Most
OFPAs have corresponding options rules.
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The reference to trading floor tickets in Rule 1014(g)(i)(A)(1) and
Advice B-6, Section B is being deleted, because Floor Brokers have long
been required to record certain information into the Floor Broker
Management System (``FBMS''), pursuant to Rule 1063.
In addition, the Exchange proposes to delete subparagraphs
(g)(iii), New Unit/New Option Enhanced Specialist Participation, and
(g)(iv), New Product Enhanced Specialist Participation, because these
are no longer applied. All options are subject to the Specialist
Enhanced Participation in Rule 1014(g)(ii), which then applies to
manual trades on the trading floor by virtue of Rule 1014(g)(v) and to
automatically executed trades through Phlx XL II by virtue of Rule
1014(g)(v)(ii). Accordingly, references to these now-deleted sub-
paragraphs (g)(iii) and (g)(iv) are also being deleted in several
places in Rule 1014. In addition, in Rule 1014(g)(ii), subparagraph (A)
is proposed to be deleted, because it covers how it is determined what
options are subject to the enhanced specialist participation, which is
no longer relevant. The same changes are proposed to Advice B-6,
Sections (C), (D) and (E).
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act \5\ in general, and furthers the objectives of Section
6(b)(5) of the Act \6\ in particular, in that it 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,
by updating an Exchange rule.
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\5\ 15 U.S.C. 78f(b).
\6\ 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
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 proposed 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 the filing, or such
shorter time as the Commission may designate, if consistent with the
protection of investors and the public interest, the proposed rule
change has become effective pursuant to Section 19(b)(3)(A) of the Act
\7\ and Rule 19b-4(f)(6) thereunder.\8\
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\7\ 15 U.S.C. 78s(b)(3)(A).
\8\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the self-regulatory organization to give 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.
Phlx has satisfied this requirement.
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At any time within 60 days of the filing of the 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. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or 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 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 [email protected]. Please include
File Number SR-Phlx-2010-131 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-2010-131. 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, 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
[[Page 62623]]
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 No. SR-Phlx-2010-131 and should be submitted on or
before November 2, 2010.
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\9\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\9\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-25495 Filed 10-8-10; 8:45 am]
BILLING CODE 8011-01-P