[Federal Register Volume 74, Number 209 (Friday, October 30, 2009)]
[Notices]
[Pages 56255-56257]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-26172]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60877; File No. SR-Phlx-2009-92]


Self-Regulatory Organizations; NASDAQ OMX PHLX, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change Relating to 
the TOPO Plus Orders Data Feed

October 26, 2009.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given 
that on October 21, 2009, 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 and II, 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 make available without charge a direct 
data product related to the trading of standardized options on the 
Exchange's enhanced electronic trading platform for options, Phlx XL 
II.\3\ Specifically, the Exchange is proposing to establish and deploy 
a direct data feed product called Top of Phlx Options Plus Orders 
(``TOPO Plus Orders''), which will include disseminated Exchange top-
of-market data (including orders, quotes and trades), together with all 
information that is included in the Exchange's Specialized Order Feed 
(``SOF'') as described more fully below.
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    \3\ See Securities Exchange Act Release No. 59995 (May 28, 
2009), 74 FR 26750 (June 3, 2009) (SR-Phlx-2009-32).
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    The text of the proposed rule change is available on the Exchange's 
Web site at http://www.nasdaqtrader.com/micro.aspx?id=PHLXRulefilings, 
at the principal office of the Exchange, and at the Commission's Public 
Reference Room.

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 make available 
without charge the TOPO Plus Orders data feed.
    On June 5, 2009, the Exchange launched the Phlx XL II system, which 
was subject to a symbol-by-symbol rollout schedule that was completed 
on July 23, 2009 (the ``rollout''). Currently, all options listed on 
the Exchange are traded on Phlx XL II. In conjunction with the launch 
and rollout of the Phlx XL II system, the Exchange developed the Top of 
Phlx Options data feed (``TOPO'') \4\ which provides to subscribers a 
direct data feed that includes the Exchange's best bid and offer 
position, with aggregate size, based on displayable order and quoting 
interest on the Phlx XL II system. The data contained in the TOPO data 
feed is identical to the data sent to the processor for the Options 
Price Regulatory Authority (``OPRA''), and the TOPO and OPRA data leave 
the Phlx XL II system at the same time.
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    \4\ See Securities Exchange Act Release No. 60459 (August 7, 
2009), 74 FR 41466 (August 17, 2009) (SR-Phlx-2009-54).
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    In conjunction with the deployment of Phlx XL II, the Exchange 
represented that, within 90 days following the completion of the 
rollout,\5\ it will offer a data feed (TOPO Plus Orders) to all market 
participants, which would include disseminated Exchange top-of-market 
data (including orders, quotes and trades) and all information that is 
included in SOF.
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    \5\ Specifically, by October 21, 2009.
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    The SOF provides to its users real-time information to keep track 
of the single order book(s), single and complex orders, complex 
strategy and Live Auction for all symbols for which the user is 
configured. Users may be configured for one or more symbols. SOF 
provides real-time data for the entire book to its users. It is a 
compilation of limit order data resident in the Exchange's limit order 
book for options traded on the Exchange that the Exchange provides 
through a real-time data feed. The Exchange updates SOF information 
upon receipt of each displayed limit order. For every limit price, the 
SOF includes the aggregate order volume.
    TOPO Plus Orders responds to the desire of some market participants 
for depth-of-book data. TOPO Plus Orders will provide top of book data 
to its users, together with the same data provided to SOF users. The 
Exchange represents that it will send this data to TOPO Plus Orders 
users no later than it will send such data to SOF users, and that it 
will make the data feed available to any market participant that wishes 
to subscribe to it.
    The Exchange anticipates that it will eventually phase out SOF and 
make available TOPO to users that want only top of book data, and TOPO 
Plus Orders to users that want both top of book data and the real-time 
full limit order book data feed.
    Initially, the Exchange will not charge fees for TOPO Plus. The 
Exchange contemplates that it will propose to charge fees for the use 
of TOPO Plus Orders. The Exchange will submit a

[[Page 56256]]

proposed rule change to the Commission in order to implement those 
fees.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\6\ in general and, because 
there will be no initial fees charged, with Section 6(b)(4) of the 
Act,\7\ in particular, in that it provides for the equitable allocation 
of reasonable dues, fees and other charges among members and issuers 
and other persons using any facility or system which Phlx operates or 
controls.
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    \6\ 15 U.S.C. 78f.
    \7\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes that the proposed rule change is also 
consistent with the provisions of Section 6(b)(5) of the Act,\8\ in 
that it is designed 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; and is not designed to permit unfair discrimination between 
customers, issuers, brokers, or dealers, or to regulate by virtue of 
any authority conferred by the Act matters not related to the purposes 
of the Act the administration of the Exchange. Specifically, the 
proposal is not designed to permit unfair discrimination among 
participants because it provides a mechanism for all market 
participants to obtain data that was previously available only to SOF 
users.
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    \8\ 15 U.S.C. 78f(b)(5).
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    The Exchange further believes that the proposed rule change is also 
consistent with Section 6(b)(8) of the Act \9\ in that it does not 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act.
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    \9\ 15 U.S.C. 78f(b)(8).
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    The Exchange believes that this proposal is in keeping with all of 
these principles by facilitating investors' prompt access to Exchange 
limit order book information and providing increased transparency. 
Additionally, this proposal provides market participants with 
supplemental market information concerning orders on the Exchange's 
limit order book, which supports the system of a free and open market.

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: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days after the date of the filing, or such 
shorter time as the Commission may designate, it has become effective 
pursuant to Section 19(b)(3)(A) of the Act \10\ and Rule 19b-4(f)(6) 
\11\ thereunder.
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file 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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    A proposed rule change filed under Rule 19b-4(f)(6) \12\ normally 
does not become operative for 30 days after the date of filing. 
However, Rule 19b-4(f)(6)(iii) \13\ permits the Commission to designate 
a shorter time if such action is consistent with the protection of 
investors and the public interest. The Exchange requests that the 
Commission waive the 30-day operative delay so that the proposal may 
become operative immediately upon filing. The Exchange believes that 
such a waiver will address the importance of increasing the Exchange's 
transparency by providing the TOPO Plus Orders data feed to market 
participants, and ensure that the Exchange will meet its obligation to 
deploy TOPO Plus Orders by October 21, 2009.
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    \12\ 17 CFR 240.19b-4(f)(6).
    \13\ 17 CFR 240.19b-4(f)(6)(iii).
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    The Commission believes waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest 
because such waiver will allow the Exchange to immediately provide 
increased transparency to market participants without charge by 
providing limit order data resident in the Exchange's limit order book 
to all market participants, rather than just to those participants 
eligible to receive data through SOF. Further, waiver of the operative 
delay will allow the Exchange to meet its obligation to make such data 
available to all market participants by October 21, 2009. Accordingly, 
the Commission designates the proposed rule change operative upon 
filing with the Commission.\14\
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    \14\ For purposes only of waiving the 30-day operative delay of 
this proposal, the Commission has considered the proposed rule's 
impact on efficiency, competition, and capital formation. 15 U.S.C. 
78c(f).
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    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.

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-2009-92 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-2009-92. 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

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available for inspection and copying 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 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-Phlx-2009-92 and should be 
submitted on or before November 20, 2009.

    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).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-26172 Filed 10-29-09; 8:45 am]
BILLING CODE 8011-01-P