[Federal Register: December 16, 2009 (Volume 74, Number 240)]
[Notices]
[Page 66627]
[DOCID:fr16de09-43]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Project No. 13596-000]

McGinnis, Inc.; Notice of Preliminary Permit Application Accepted
for Filing and Soliciting Comments, Motions To Intervene, and Competing
Applications

December 10, 2009.
    On September 29, 2009, McGinnis, Inc. filed an application for a
preliminary permit, pursuant to section 4(f) of the Federal Power Act,
proposing to study the feasibility of the Smithland Hydrokinetic
Project, which would be located downstream of the U.S. Army Corps of
Engineer's Smithland Lock and Dam on the Ohio River near the town of
Hamletsburg, Pope County, Illinois; and town of Smithland, Livingston
County, Kentucky. The sole purpose of a preliminary permit, if issued,
is to grant the permit holder priority to file a license application
during the permit term. A preliminary permit does not authorize the
permit holder to perform any land disturbing activities or otherwise
enter upon lands or waters owned by others without the owners' express
permission.
    The proposed project would consist of the following:
    (1) Ten 35-kilowatt turbine generators mounted to a barge anchored
in the Ohio River downstream of the Smithland Lock and Dam; (2) an
armored transmission cable extending from the barge to a small shore
substation; and (3) an access road needed to access the shore
substation. The project would have an estimated annual generation of
1,533,000 kilowatt-hours.
    Applicant Contact: Mr. Bruce D. McGinnis, Sr.; McGinnis, Inc.; P.O.
Box 534; 502 Second St. Ext.; South Point, OH 45680; or phone 740-377-
4391.
    FERC Contact: Monte TerHaar at<EMAIL_ADDRESS>or phone 202-
502-6035.
    Deadline for filing comments, motions to intervene, competing
applications (without notices of intent), or notices of intent to file
competing applications: 60 days from the issuance of this notice.
Comments, motions to intervene, notices of intent, and competing
applications may be filed electronically via the Internet. See 18 CFR
385.2001(a)(1)(iii) and the instructions on the Commission's Web site
(http://www.ferc.gov/docs-filing/ferconline.asp) under the ``eFiling''
link. For a simpler method of submitting text only comments, click on
``Quick Comment.'' For assistance, please contact FERC Online Support
at<EMAIL_ADDRESS>call toll-free at<PHONE_NUMBER>; or,
for TTY, contact<PHONE_NUMBER>. Although the Commission strongly
encourages electronic filing, documents may also be paper-filed. To
paper-file, mail an original and eight copies to: Kimberly D. Bose,
Secretary, Federal Energy Regulatory Commission, 888 First Street, NE.,
Washington, DC 20426.
    More information about this project, including a copy of the
application, can be viewed or printed on the ``eLibrary'' link of
Commission's Web site at http://www.ferc.gov/docs-filing/elibrary.asp.
Enter the docket number (P-13596) in the docket number field to access
the document. For assistance, contact FERC Online Support.

Kimberly D. Bose,
Secretary.
[FR Doc. E9-29916 Filed 12-15-09; 8:45 am]

BILLING CODE 6717-01-P


[Federal Register Volume 82, Number 178 (Friday, September 15, 2017)]
[Notices]
[Pages 43358-43359]
[FR Doc No: 2017-19698]

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ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-ORD-2015-0239; FRL-9967-16-ORD]

Human Studies Review Board Advisory Committee; Request for
Nominations

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice.

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SUMMARY: The U.S. Environmental Protection Agency (EPA) invites
nominations from a diverse range of qualified candidates with expertise
in the area of bioethics and statistics to be considered for
appointment to its Human Studies Review Board (HSRB) federal advisory
committee. HSRB vacancies will be filled in the fall of 2017. In
addition to this Federal Register notice, additional sources of
nominations may be used to obtain a balanced committee.

DATES: Submit nominations by October 16, 2017.

ADDRESSES: Submit your nominations by using any of the following
methods:
    Email: Submit nominations electronically using the subject line:
``HSRB Membership 2017'' to<EMAIL_ADDRESS>    USPS Mail: Human Studies Review Board, DFO, Environmental
Protection Agency, Mail code: 8105R, 1200 Pennsylvania Ave. NW.,
Washington, DC 20460.
    Hand or Courier Delivery: Human Studies Review Board, DFO, Room
41249, EPA, Ronald Reagan Building, 1300 Pennsylvania Avenue NW.,
MC8105R, Washington, DC 20004. Deliveries are accepted from 8:30 a.m.
to 4:30 p.m., Monday through Friday, excluding legal holidays. Special
arrangements should be made for deliveries of boxed information.

FOR FURTHER INFORMATION CONTACT: Thomas O'Farrell, Office of the
Science Advisor, Mail Code 8105R, U.S. Environmental Protection Agency,
1200 Pennsylvania Avenue NW., Washington, DC 20460; telephone number:
(202) 564-8451, fax number:<PHONE_NUMBER>, email:
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Background

    On February 6, 2006, the Agency published a final rule for the
protection of human subjects in research (71 FR 24 6138) that called
for creating a new, independent human studies review board (i.e.,
HSRB). The HSRB is a federal advisory committee operating in accordance
with the Federal Advisory Committee Act (FACA) 5 U.S.C. App. 2 section
9 (Pub. L. 92-463). The HSRB provides advice, information, and
recommendations to EPA on issues related to scientific and ethical
aspects of human subjects research. The major objectives of the HSRB
are to provide advice and recommendations on: (1) Research proposals
and protocols that include human subjects; (2) reports of completed
research with human subjects; and (3) how to strengthen EPA's programs
for protection of human subjects of research. Typically, the HSRB
reviews protocols and completed studies involving pesticide studies,
such as worker exposure studies with agricultural handlers applying
pesticides in field conditions; janitorial maintenance personnel
applying antimicrobial pesticides in commercial settings; and field
efficacy studies for skin applied insect repellent products. The HSRB
reports to the EPA Administrator through EPA's Science Advisor. General
information concerning the HSRB, including its charter, current
membership, and activities can be found on the EPA Web site at https://www.epa.gov/osa/human-studies-review-board.
    HSRB members serve as special government employees or regular
government employees. Members are appointed by the EPA Administrator
for either two or three year terms with the possibility of
reappointment for additional terms, with a maximum of six years of
service. The HSRB convenes up to four times a year, with most of the
meetings being virtual. The average workload for HSRB members is
approximately 20 hours per meeting, including the time spent at the
meeting. Responsibilities of HSRB members include reviewing extensive
background materials prior to meetings of the Board, preparing draft
responses to Agency charge questions, attending Board meetings,
participating in the discussion and deliberations at these meetings,
drafting assigned sections of meeting reports, and assisting with the
finalization of HSRB reports. EPA compensates special government
employees for their time and provides reimbursement for travel and
other incidental expenses associated with official government business
related to the HSRB meetings. EPA values and welcomes diversity. In an
effort to obtain nominations of diverse candidates, EPA encourages
nominations of women and men of all racial and ethnic groups, as well
as from a variety of backgrounds (e.g., industry, non-profit
organizations, academia, and government).
    Candidates not selected for HSRB membership at this time may be
considered for HSRB membership as vacancies arise in the future or for
service as consultants to the HSRB.
    Members of the HSRB are subject to the provisions of 5 CFR part
2634, Executive Branch Financial Disclosure, as supplemented by the EPA
in 5 CFR part 6401. In anticipation of this requirement, each nominee
will be asked to submit confidential financial information that fully
discloses, among other financial interests, the candidate's employment,
stocks and bonds, and where applicable, sources of research support.
The information provided is strictly confidential and will not be
disclosed to the public. Before a candidate is considered further for
service on the HSRB, EPA will evaluate each candidate to assess whether
there is any conflict of financial interest, appearance of a lack of
impartiality, or prior involvement with matters likely to be reviewed
by the Board.

    Nominations will be evaluated on the basis of several criteria,
including: The professional background, expertise, and experience that
would contribute to the diversity of perspectives of the committee;
interpersonal, oral, and written communication skills and other
attributes that would contribute to the HSRB's collaborative process;
consensus building skills; absence of any financial conflicts of
interest or the appearance of a lack of impartiality, or lack of
independence, or bias; and the availability to participate in meetings
and administrative sessions, participate in teleconferences, develop
policy recommendations to the Administrator, and prepare
recommendations and advice in reports.
    Nominations should include a resume or curriculum vitae providing
the nominee's educational background, qualifications, leadership
positions in national associations or professional societies, relevant
research experience and publications along with a short (one page)
biography describing how the nominee meets the above criteria and other
information that may be helpful in evaluating the nomination, as well
as the nominee's current business address, email address, and daytime
telephone number. Interested candidates may self-nominate.
    To help the Agency in evaluating the effectiveness of its outreach
efforts, nominees are requested to inform the Agency of how you learned
of this opportunity.
    Final selection of HSRB members is a discretionary function of the
Agency and will be announced on the HSRB Web site at https://www.epa.gov/osa/human-studies-review-board as soon as selections are
made.

    Dated: August 24, 2017.
Robert Kavlock,
EPA Science Advisor.
[FR Doc. 2017-19698 Filed 9-14-17; 8:45 am]
 BILLING CODE 6560-50-P


[Federal Register: August 6, 2009 (Volume 74, Number 150)]
[Notices]
[Page 39362-39371]
[DOCID:fr06au09-98]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60405; File No. 4-546]

 Joint Industry Plan; Order Approving the National Market System
Plan Relating to Options Order Protection and Locked/Crossed Markets
Submitted by the Chicago Board Options Exchange, Incorporated,
International Securities Exchange, LLC, The NASDAQ Stock Market LLC,
NASDAQ OMX BX, Inc., NASDAQ OMX PHLX, Inc., NYSE Amex LLC, and NYSE
Arca, Inc.

July 30, 2009.

I. Introduction

    The proposed Options Order Protection and Locked/Crossed Market
Plan (``Proposed Plan'') was filed jointly, pursuant to Rule 608 of
Regulation NMS under the Securities Exchange Act of 1934 (``Act'')
(``Regulation NMS'') (``Rule 608''),\1\ by the International Securities
Exchange, LLC (``ISE'') and NYSE Arca, Inc. (``NYSE Arca'') on
September 13, 2007 and September 18, 2007, respectively, with the
Securities and Exchange Commission (``Commission'').\2\ On December 11,
2007, ISE and NYSE Arca separately filed Amendment No. 1 to the
Proposed Plan.\3\ On April 24, 2008, and April 17, 2008, ISE and NYSE
Arca, respectively, filed Amendment No. 2 to the Proposed Plan.\4\ On
November 10,

2008 and October 31, 2008, ISE and NYSE Arca, respectively, filed
Amendment No. 3 to the Proposed Plan.\5\ On April 30, 2008, May 8,
2008, June 18, 2008, June 18, 2008, and July 9, 2008, respectively,
Chicago Board Options Exchange, Incorporated (``CBOE''), The NASDAQ
Stock Market LLC (``Nasdaq''), American Stock Exchange LLC (``Amex'')
(f/k/a NYSE Alternext US LLC, ``NYSE Alternext,'' n/k/a NYSE Amex LLC,
``NYSE Amex''), Philadelphia Stock Exchange, Incorporated (n/k/a NASDAQ
OMX PHLX, Inc., ``Phlx''), and Boston Stock Exchange, Inc. (``BSE'')
(n/k/a NASDAQ OMX BX, Inc., ``BX'' and together with ISE, NYSE Arca,
CBOE, Nasdaq, Amex, and Phlx, the ``Proposing Exchanges'') filed with
the Commission the Proposed Plan.\6\ On November 25, 2008, November 26,
2008, December 2, 2008, December 4, 2008, and December 5, 2008, CBOE,
NYSE Alternext, BSE, Phlx, and Nasdaq, respectively, filed Amendment
No. 1 to the Proposed Plan.\7\ On April 2, 2009, a detailed summary of
the Proposed Plan was published for comment in the Federal Register.\8\
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    \1\ 17 CFR 242.608.
    \2\ See letter from Michael J. Simon, General Counsel, ISE, to
Nancy M. Morris, Secretary, Commission, dated September 12, 2007
(``ISE Letter 1''); and letter from Peter G. Armstrong, Managing
Director, Options, NYSE Arca, to Nancy M. Morris, Secretary,
Commission, dated September 14, 2007 (``NYSE Arca Letter 1'').
    \3\ See letter from Michael J. Simon, General Counsel, ISE, to
Nancy M. Morris, Secretary, Commission, dated December 10, 2007; and
letter from Peter G. Armstrong, Managing Director, Options, NYSE
Arca, to Nancy M. Morris, Secretary, Commission, dated December 10,
2007.
    \4\ Amendment No. 2 superseded Amendment No. 1 and replaced it
in its entirety. See letter from Michael J. Simon, General Counsel,
ISE, to Nancy M. Morris, Secretary, Commission, dated April 16,
2008; and letter from Peter G. Armstrong, Managing Director,
Options, NYSE Arca, to Nancy M. Morris, Secretary, Commission, dated
April 16, 2008.
    \5\ See letter from Michael J. Simon, General Counsel, ISE, to
Florence Harmon, Acting Secretary, Commission, dated November 7,
2008 (``ISE Letter 2''); and letter from Peter G. Armstrong,
Managing Director, Options, NYSE Arca, to Florence Harmon, Acting
Secretary, Commission, dated October 30, 2008 (``NYSE Arca Letter
2'').
    \6\ In their respective filings of the Proposed Plan, Amex, BSE,
CBOE, Nasdaq, and Phlx incorporated the changes made by ISE and NYSE
Arca in Amendment No. 2. See letters from Jeffrey P. Burns, Vice
President and Associate General Counsel, Amex, to Nancy M. Morris,
Secretary, Commission, dated June 17, 2008 (``Amex Letter 1'');
Bruce Goodhue, Chief Regulatory Officer, BSE, to Florence Harmon,
Acting Secretary, Commission, dated July 8, 2008 (``BSE Letter 1'');
Edward J. Joyce, President and Chief Operating Officer, CBOE, to
Nancy M. Morris, Secretary, Commission, dated April 29, 2008 (``CBOE
Letter 1''); Jeffrey S. Davis, Vice President and Deputy General
Counsel, The NASDAQ OMX Group, Inc., to Nancy M. Morris, Secretary,
Commission, dated May 7, 2008 (``Nasdaq Letter 1''); and Richard S.
Rudolph, Vice President and Counsel, Phlx, to Nancy M. Morris,
Secretary, Commission, dated June 17, 2008 (``Phlx Letter 1'').
    \7\ In their respective Amendment No. 1 to the Proposed Plan,
BSE, CBOE, NYSE Alternext, Phlx, and Nasdaq made changes identical
to those made by ISE and NYSE Arca in Amendment No. 3. See letters
from Edward J. Joyce, President and Chief Operating Officer, CBOE,
to Florence Harmon, Acting Secretary, Commission, dated November 25,
2008 (``CBOE Letter 2''); Jeffrey P. Burns, Managing Director, NYSE
Alternext, to Florence Harmon, Acting Secretary, Commission, dated
November 25, 2008 (``Amex Letter 2''); John Katovich, Vice
President, BSE, to Florence Harmon, Acting Secretary, Commission,
dated December 1, 2008 (``BSE Letter 2''); Richard S. Rudolph, Vice
President and Counsel, Phlx, to Florence Harmon, Acting Secretary,
Commission, dated December 3, 2008 (``Phlx Letter 2''); and Jeffrey
S. Davis, Vice President and Deputy General Counsel, The NASDAQ OMX
Group, Inc., to Florence Harmon, Acting Secretary, Commission, dated
December 4, 2008 (``Nasdaq Letter 2'').
    \8\ Securities Exchange Act Release No. 59647 (March 30, 2009),
74 FR 15010 (File No. 4-546) (``Proposed Plan Notice''). The full
text of the Proposed Plan submitted by the Proposing Exchanges, is
available on the Commission's Web site at http://sec.gov/rules/sro/
nms/nmsarchive/nms2007.shtml#4-546, at each Proposing Exchange, and
at the Commission's Public Reference Room.
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    The Commission received one comment on the Proposed Plan.\9\
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    \9\ Letter from John C. Nagel, Managing Director & Deputy
General Counsel, Citadel Investment Group L.L.C. (``Citadel'') to
Nancy M. Morris, Secretary, Commission, dated July 18, 2008
(``Citadel Letter''). The Citadel Letter cited to Citadel's comments
made in a letter from John C. Nagel, Managing Director & Deputy
General Counsel, Citadel to Nancy M. Morris, Secretary, Commission,
dated July 15, 2008 (Petition for Rulemaking to Address Excessive
Access Fees in the Options Markets) (``Petition for Rulemaking'').
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    This order approves the Proposed Plan, with changes as the
Commission deems necessary or appropriate, thus authorizing CBOE, ISE,
Nasdaq, BX, Phlx, Amex, and NYSE Arca to act jointly to implement the
Proposed Plan, as modified herein, as a means of facilitating a
national market system in accordance with the requirements of Section
11A of the Act.\10\
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    \10\ 15 U.S.C. 78k-1. See also 17 CFR 242.608(b)(2). The
approved Options Order Protection and Locked/Crossed Market Plan,
which incorporates the changes the Commissions deems necessary or
appropriate, is attached here as Appendix A and is referred to
herein as the ``Options Linkage Plan.''
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II. Background

A. Section 11A of the Act

    In 1975, Congress directed the Commission, through the enactment of
Section 11A of the Act,\11\ to facilitate the establishment of a
national market system to link together the individual markets that
trade securities. Congress found the development of a national market
system to be in the public interest and appropriate for the protection
of investors and the maintenance of fair and orderly markets to assure
fair competition among the exchange markets.\12\ Section 11A(a)(3)(B)
of the Act directs the Commission, ``by rule or order, to authorize or
require self-regulatory organizations to act jointly with respect to
matters as to which they share authority under this title in planning,
developing, operating, or regulating a national market system (or a
subsystem thereof) or one or more facilities.'' \13\ The Commission's
approval of a national market system plan is conditioned upon a finding
that the proposed plan is ``necessary or appropriate in the public
interest, for the protection of investors and the maintenance of fair
and orderly markets, to remove impediments to, and perfect the
mechanism of, a national market system, or otherwise in furtherance of
the purposes of the Act.'' \14\
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    \11\ 15 U.S.C. 78k-1.
    \12\ 15 U.S.C. 78k-1(a)(1)(C).
    \13\ 15 U.S.C. 78k-1(a)(3)(B).
    \14\ 17 CFR 242.608(b)(2).
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B. Current Plan

    Currently, the Proposing Exchanges are signatories to the Plan for
the Purpose of Creating and Operating an Intermarket Option Linkage
(``Current Plan''). The Current Plan is a national market system plan
linking its participants. The Commission approved the Current Plan on
July 28, 2000.\15\ Subsequently, both Pacific Exchange, Inc. (n/k/a
``NYSE Arca'') and Phlx submitted proposed amendments to the Current
Plan to become participants to the Current Plan. These proposed
amendments were approved on November 16, 2000.\16\ On February 5, 2004,
BSE's proposed amendment to become a participant to the Current Plan
became effective.\17\ Further, Nasdaq's proposed amendment to become a
participant to the Current Plan became effective on March 21, 2008.\18\
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    \15\ See Securities Exchange Act Release No. 43086 (July 28,
2000), 65 FR 48023 (August 4, 2000) (File No. 4-429).
    \16\ See Securities Exchange Act Release Nos. 43573 (November
16, 2000), 65 FR 70851 (November 28, 2000) (File No. 4-429) and
43574 (November 16, 2000), 65 FR 70850 (November 28, 2000) (File No.
4-429).
    \17\ See Securities Exchange Act Release No. 49198 (February 5,
2004), 69 FR 7029 (February 12, 2004) (File No. 4-429).
    \18\ See Securities Exchange Act Release No. 57545 (March 21,
2008), 73 FR 16394 (March 27, 2008) (File No. 4-429).
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    The Current Plan requires its participants to avoid, absent
reasonable justification and during normal market conditions, trading
at a price inferior to that displayed on another market (``trade-
through'').\19\ The Current Plan provides for several exceptions to
trade-through liability, including, among other things, systems
malfunction, failure of the receiving market to respond to an incoming
order within 30 seconds, failure of the market traded through to
complain within the specified time period, complex trades, trading
rotations, and non-firm quotations on the market that was traded
through.\20\ The Current Plan also provides a mechanism by which a
member of a participating exchange

could seek satisfaction if a customer order is traded through.\21\
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    \19\ Section 8(c) of the Current Plan.
    \20\ Section 8(c)(iii) of the Current Plan.
    \21\ Section 8(c)(ii) of the Current Plan.
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    Under the Current Plan, its participants agree that the
dissemination of ``locked'' or ``crossed'' markets should be avoided,
and, if their members lock or cross a market, they should take remedial
actions to unlock or uncross such market.\22\ Further, the Current Plan
contains provisions to address trade comparison, clearing, trading
halts, non-firm quotations, and administration of the Current Plan.\23\
Except with respect to the addition of new participants and the
withdrawal of current participants, any proposed change to the Current
Plan must be approved unanimously by its participants.\24\
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    \22\ Section 7(a)(i)(C) of the Current Plan.
    \23\ Sections 5, 9, and 10 of the Current Plan.
    \24\ Section 5(c)(i) of the Current Plan.
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    The participating exchanges comply with the requirements of the
Current Plan, including the prohibition against trade-throughs, by
utilizing a stand alone system (``Linkage Hub'') to send and receive
specific order types. The Linkage Hub is a centralized data
communications network that electronically links the options exchanges
to one another. The Options Clearing Corporation (``OCC'') operates the
Linkage Hub.\25\
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    \25\ See ISE Letter 2 and NYSE Arca Letter 2, supra note 5; see
also Amex Letter 2, BSE Letter 2, CBOE Letter 2, Nasdaq Letter 2,
and Phlx Letter 2, supra note 7.
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    There are three defined order types under the Current Plan that its
participants could route through the Linkage Hub to limit trade-
throughs: orders represented by eligible market makers on behalf of
customers (``Principal Acting as Agent Orders'' or ``P/A Orders'');
\26\ orders for the principal accounts of market makers and specialists
(``Principal Orders''); \27\ and orders intended to satisfy trade-
through liabilities (``Satisfaction Orders'').\28\ Non-market-maker
broker-dealers do not have access to the Linkage Hub.
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    \26\ Sections 2(16)(a) and 7(a)(ii)(A), (B) of the Current Plan.
    \27\ Sections 2(16)(b) and 7(a)(ii)(C) of the Current Plan.
    \28\ Sections 2(16)(c) and 7(a)(ii)(D) of the Current Plan.
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C. Proposed Plan

    The Proposing Exchanges are now seeking approval of an alternative
linkage plan, the Proposed Plan. As described in more detail below, the
Proposed Plan would not require a central linkage mechanism akin to the
Current Plan's Linkage Hub, and would introduce certain new features to
linkages between options markets, including an Intermarket Sweep Order
(``ISO'') similar to that available for NMS stocks under Regulation
NMS.\29\
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    \29\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496 (June 29, 2005) (File No. S7-10-04) (``NMS
Release''); 17 CFR 242.600 et seq.
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III. Discussion

    As discussed above, in 1975, Congress directed the Commission,
through the enactment of Section 11A of the Act,\30\ to facilitate the
development of a national market system consistent with the objectives
of the Act. In particular, Section 11A(a)(3)(B) of the Act \31\
authorizes the Commission ``by rule or order, to authorize or require
self-regulatory organizations to act jointly with respect to matters as
to which they share authority under this title in planning, developing,
operating, or regulating a national market system (or a subsystem
thereof) or one or more facilities.'' Rule 608 establishes the
procedures for filing, amending, and approving a national market system
plan. Approval of such a plan is conditioned upon a finding that the
proposed plan ``is necessary or appropriate in the public interest, for
the protection of investors and the maintenance of fair and orderly
markets, to remove impediments to, and perfect the mechanisms of, a
national market system, or otherwise in furtherance of the purposes of
the Act.'' \32\
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    \30\ 15 U.S.C. 78k-1.
    \31\ 15 U.S.C. 78k-1(a)(3)(B).
    \32\ 17 CFR 242.608.
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    After careful review, the Commission has determined to approve the
Proposed Plan, pursuant to Section 11A(a)(3)(B) of the Act \33\ and
Rule 608 thereunder,\34\ with changes set forth herein as the
Commission has deemed necessary and appropriate.\35\ Specifically, the
Commission finds that changes to the Proposed Plan set forth herein are
necessary and appropriate in the public interest. The Commission
further finds that the Options Linkage Plan is in furtherance of the
purposes of the Act in that it requires the protection of the best
priced displayed quotes and avoidance and reconciliation of locked and
crossed markets, and thus is necessary and appropriate in the public
interest, for the protection of investors and the maintenance of fair
and orderly markets, to remove impediments to, and perfect the
mechanisms of, a national market system.\36\
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    \33\ 15 U.S.C. 78k-1(a)(3)(B).
    \34\ 17 CFR 242.608.
    \35\ The Commission has modified the Proposed Plan to amend
Section 7 of the Proposed Plan relating to the implementation date
of the plan (see infra notes 140-143 and accompanying text).
    \36\ 17 CFR 242.608(b)(2).
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    The Commission believes that Proposed Plan's decentralized
structure will allow the Proposing Exchanges to take advantage of new
technology that allow for efficient routing and executions. The
Proposed Plan will give the Proposing Exchanges greater flexibility for
order handling as it would allow the exchanges to utilize private
linkages, instead of requiring each Proposing Exchange to connect to,
and participate in the maintenance of, a centralized hub. In addition,
the Proposed Plan would permit the use of ISOs in the options markets.
As such, the Proposed Plan would allow the Proposing Exchanges to move
towards the market structure approved by the Commission for NMS stocks
under Regulation NMS.\37\ The Commission believes that the Options
Linkage Plan will allow the Proposing Exchanges to update the way in
which they accomplish effective quote protection and locked and crossed
market reconciliation. For the reasons described above, the Commission
believes that these provisions of the Options Linkage Plan will provide
benefits to the options markets, including the Proposing Exchanges and
market participants generally.
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    \37\ See supra note 29.
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    In its comment letter on the Proposed Plan, Citadel referenced the
comments it made with regard to access fees in the options markets in
its Petition for Rulemaking.\38\ There, Citadel encouraged the
Commission to institute a rulemaking proceeding to limit the fees that
options exchanges may charge non-members to obtain access to
quotations.\39\ Commission staff is currently considering Citadel's
petition.
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    \38\ See Citadel Letter, supra note 9.
    \39\ See Petition for Rulemaking, supra note 9.
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A. Order Protection

1. Requirement of Reasonable Policies and Procedures
    The Options Linkage Plan requires each Participant \40\ to
establish,

maintain, and enforce written policies and procedures as approved by
the Commission that are reasonably designed to prevent Trade-Throughs
in that Participant's market in Eligible Options Classes.\41\ A
``Trade-Through'' \42\ is defined as a transaction in an option series,
either as principal or agent, at a price that is lower than a Protected
Bid or higher than a Protected Offer. A ``Protected Bid'' or a
``Protected Offer'' \43\ means a bid or offer in an option series that
is displayed by an Eligible Exchange, is disseminated pursuant to the
OPRA Plan, and is the Best Bid or Best Offer of an Eligible Exchange. A
``Best Bid'' or ``Best Offer'' \44\ means the highest bid price or the
lowest offer price communicated by a member of an Eligible Exchange to
any broker-dealer or to any customer at which such member is willing to
buy or sell, either as principal or agent.
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    \40\ The Options Linkage Plan defines ``Participant'' to mean an
Eligible Exchange whose participation in the plan has become
effective pursuant to Section 3(c) of the Options Linkage Plan. See
Section 2(15) of the Options Linkage Plan. The Options Linkage Plan
defines ``Eligible Exchange'' to mean a national securities exchange
registered with the Commission in accordance with Section 6(a) of
the Act that, among other things, is a Participant Exchange in OCC
(as that term is defined in Section VII of the OCC by-laws) and is a
party to the OPRA Plan (as that term is described in Section I of
the OPRA Plan). ``OPRA Plan'' means the plan filed by the Options
Price Reporting Authority with the Commission pursuant to Section
11A(a)(1)(C)(iii) of the Act and approved by the Commission and
declared effective as of January 22, 1976, as from time to time
amended. See Section 2(14) of the Options Linkage Plan. For the
definitions of ``Trade-Through,'' ``Best Bid'' or ``Best Offer,''
``Locked Market,'' and ``Crossed Market,'' see infra notes 42, 44,
and 119 and accompanying texts.
    \41\ Section 5(a)(i) of the Options Linkage Plan.
    \42\ Section 2(21) of the Options Linkage Plan.
    \43\ Section 2(17) of the Options Linkage Plan. Protected Bid
and Protected Offer, together are referred to herein as ``Protected
Quotation.'' See Section 2(18) of the Options Linkage Plan.
    \44\ Sections 2(1) and 2(2) of the Options Linkage Plan.
---------------------------------------------------------------------------

    The Options Linkage Plan also requires each Participant to agree to
conduct surveillance of its market on a regular basis to ascertain the
effectiveness of the policies and procedures to prevent Trade-Throughs
and to take prompt action to remedy deficiencies in such policies and
procedures.\45\
---------------------------------------------------------------------------

    \45\ Section 5(a)(ii) of the Options Linkage Plan.
---------------------------------------------------------------------------

    As is the case currently for NMS stocks under Regulation NMS,\46\
the Commission believes the Options Linkage Plan's policies and
procedures-based approach to preventing Trade-Throughs in options is in
the public interest, appropriate for the protection of investors and
the maintenance of fair and orderly markets, and is consistent with
Section 11A(a)(1)(C) of the Act.\47\ The requirement in Section 5(a)(i)
of the Options Linkage Plan is virtually identical to the requirement
in Rule 611(a) of Regulation NMS. The Commission expects the
Participants in the Options Linkage Plan will establish, maintain, and
enforce written policies and procedures comparable to those
established, maintained and enforced by the market centers subject to
Rule 611(a). The Commission believes that a policies and procedures-
based approach to preventing Trade-Throughs in options is reasonable
given the increasingly high volume of trading in options, and the
latencies and other discrepancies in the delivery and receipt of
quotation data. The requirement of written policies and procedures, as
well as the responsibility assigned to Participants to regularly
surveil to ascertain the effectiveness of their procedures and take
prompt remedial steps, is designed to achieve the objective of
eliminating all Trade-Throughs that reasonably can be prevented, while
also recognizing the inherent difficulties of eliminating Trade-Through
transactions that, despite a Participant's reasonable efforts, may
occur.
---------------------------------------------------------------------------

    \46\ See Rule 611(a) of Regulation NMS (17 CFR 242.611(a)).
    \47\ 15 U.S.C. 78k-1(a)(1)(C).
---------------------------------------------------------------------------

    The Commission believes that each Participant's policies and
procedures must enable it to monitor, on a real-time basis, the
Protected Quotations displayed by Eligible Exchanges so as to determine
the prices at which the Participant can and cannot execute trades. In
addition, the Commission believes that a Participant's policies and
procedures must establish objective standards and parameters governing
its use of the exceptions set forth in Section 5(b) of the Options
Linkage Plan, discussed below, and expects each Participant's order-
handling and trading systems to be programmed in accordance with these
policies and procedures. Finally, the Participant must take such steps
as are necessary to enable it to enforce its policies and procedures
effectively. For example, the Commission believes that Participants
will need to establish procedures such as regular exception reports to
evaluate their trading and order-routing practices. The Commission
believes that each Participant Exchange will need to examine such
reports to affirm that its policies and procedures have been followed
by its personnel and properly coded into its systems and, if not, to
promptly identify the reasons and take remedial action.\48\
---------------------------------------------------------------------------

    \48\ See NMS Release at 37535, supra note 29.
---------------------------------------------------------------------------

    Participants' obligations under the Options Linkage Plan to
maintain and enforce policies and procedures reasonably designed to
prevent Trade-Throughs is reinforced by the Options Linkage Plan's
explicit assignment of responsibility to Participants to surveil to
ascertain the effectiveness of their policies and procedures.
Participants cannot merely establish policies and procedures that may
be reasonable when created and assume that such policies and procedures
continue to satisfy the requirements of the Options Linkage Plan.
Rather, the Commission believes that Participants must regularly assess
the continuing effectiveness of their procedures and take prompt action
when needed to remedy deficiencies. In particular, Participants must
engage in regular surveillance to determine whether Trade-Throughs are
occurring without an applicable exception and whether they have failed
to implement and maintain policies and procedures that would have
reasonably prevented such Trade-Throughs. Further, this requirement is
an important element of a Participant's obligations under Rule 608(c)
of Regulation NMS, which require that each self-regulatory
organization, absent reasonable justification or excuse, enforce
compliance with any national market system plan by its members and
persons associated with its members.\49\
---------------------------------------------------------------------------

    \49\ 17 CFR 242.608(c).
---------------------------------------------------------------------------

2. Exceptions to Trade-Throughs
    The Options Linkage Plan provides exceptions for certain
transactions from the prohibition against Trade-Throughs.\50\ The
Options Linkage Plan also provides that, if a Participant relies on an
exception, it would be required to establish, maintain, and enforce
written policies and procedures reasonably designed to assure
compliance with the terms of the exception.\51\ Except for the proposed
exception for stopped orders and price improvement,\52\ the exceptions
in the Options Linkage Plan correspond to trade-through exceptions
found in either the Current Plan or in Regulation NMS.\53\ The Options
Linkage Plan includes the following exceptions from the prohibition
against Trade-Throughs: system issues; \54\ trading rotations; \55\
crossed markets; \56\ intermarket sweep orders; \57\ quote flickering;
\58\ non-firm quotes; \59\ complex trades; \60\ customer stopped
orders; \61\ stopped orders and price

improvement; \62\ and benchmark trades.\63\
---------------------------------------------------------------------------

    \50\ See Proposed Plan Notice at 15012, supra note 8, for a more
detailed description of the proposed Trade-Through exceptions.
    \51\ Section 5(a)(i) of the Options Linkage Plan.
    \52\ Section 5(b)(x) of the Options Linkage Plan.
    \53\ Rule 611 of Regulation NMS, known also as the Order
Protection Rule, governs trade-through liability for NMS Stocks. See
17 CFR 242.611.
    \54\ Section 5(b)(i) of the Options Linkage Plan.
    \55\ Section 5(b)(ii) of the Options Linkage Plan.
    \56\ Section 5(b)(iii) of the Options Linkage Plan. For the
definition of a ``Crossed Market,'' see infra note 119 and
accompanying text.
    \57\ Section 5(b)(iv)-(v) of the Options Linkage Plan.
    \58\ Section 5(b)(vi) of the Options Linkage Plan.
    \59\ Section 5(b)(vii) of the Options Linkage Plan.
    \60\ Section 5(b)(viii) of the Options Linkage Plan.
    \61\ Section 5(b)(ix) of the Options Linkage Plan.
    \62\ Section 5(b)(x) of the Options Linkage Plan.
    \63\ Section 5(b)(xi) of the Options Linkage Plan.
---------------------------------------------------------------------------

    The Commission believes these exceptions will permit a workable
intermarket price protection structure for the options market, and are
consistent with the principle of price protection. As discussed below,
the Commission finds that each of these exceptions is in the public
interest, appropriate for the protection of investors and the
maintenance of fair and orderly markets,\64\ and believes each assures
fair competition among exchange markets, consistent with Section
11A(a)(1)(C) of the Act.\65\
---------------------------------------------------------------------------

    \64\ 17 CFR 242.608(b)(2).
    \65\ 15 U.S.C. 78k-1(a)(1)(C).
---------------------------------------------------------------------------

    System Issues: \66\ This exception, similar to an exception in the
Current Plan, permits a Participant to trade through a Protected
Quotation if the Eligible Exchange displaying the Protected Quotation
that was traded through was experiencing a failure, material delay, or
malfunction of its systems or equipment when the Trade-Through
occurred. This exception gives Participants a ``self-help'' remedy if
another Eligible Exchange repeatedly fails to provide an immediate
response to incoming orders attempting to access its quotes. As the
Commission stated in approving a parallel exception for stocks under
Regulation NMS, the Eligible Exchange receiving an order can only be
held responsible for its own turnaround time (i.e., from the time it
first received an order to the time it transmits a response to the
order). Accordingly, the routing exchange will be required to develop
policies and procedures that allow for any potential delays in
transmission not attributable to the receiving exchange. This exception
also covers any failure or malfunction of an Eligible Exchange's
systems or equipment, as well as any material delay.\67\
---------------------------------------------------------------------------

    \66\ Section 5(b)(i) of the Options Linkage Plan.
    \67\ See NMS Release at 37535, supra note 29.
---------------------------------------------------------------------------

    Participants will need to establish specific objective parameters
governing their use of this ``self-help'' exemption as part of their
reasonable policies and procedures. The Commission believes, for
example, a single failure to respond within one second generally will
not justify future bypassing of another Eligible Exchange's quotations.
Many failures to respond within one second in a short time period, in
contrast, clearly will warrant use of the exception. The Commission
believes that a Participant making use of this exception must notify
the non-responding Eligible Exchange immediately after (or at the same
time as) electing this exception pursuant to reasonable and objective
standards contained in its policies and procedures in order to alert
the non-responding Eligible Exchange that the Participant intends to
make use of this exception with respect to the non-responding Eligible
Exchange's quotes.\68\
---------------------------------------------------------------------------

    \68\ Id.
---------------------------------------------------------------------------

    The Commission believes that a Participant should be entitled to
bypass an away market's quotations if that market fails to respond to
incoming orders attempting to access a displayed quote. The Commission
believes that this exception will provide Participants with the
necessary flexibility for dealing with problems that occur on an away
market during the trading day. Further, the Commission finds that this
exception is in the public interest, appropriate for the protection of
investors and the maintenance of fair and orderly markets,\69\ and
believes it assures fair competition among exchange markets, consistent
with Section 11A(a)(1)(C) of the Act.\70\
---------------------------------------------------------------------------

    \69\ 17 CFR 242.608(b)(2).
    \70\ 15 U.S.C. 78k-1(a)(1)(C).
---------------------------------------------------------------------------

    Trading Rotations: \71\ This exception, which is carried over from
the Current Plan \72\ and similar to an exception available for NMS
stocks under Regulation NMS,\73\ permits a Participant to trade through
a Protected Quotation disseminated by an Eligible Exchange during a
trading rotation. Options exchanges use a trading rotation to open an
option for trading or reopen an option after a trading halt.
---------------------------------------------------------------------------

    \71\ Section 5(b)(ii) of the Options Linkage Plan.
    \72\ See Section 8(c)(iii)(E) of the Current Plan.
    \73\ See Rule 611(b)(3) of Regulation NMS under the Act (17 CFR
242.611(b)(3)).
---------------------------------------------------------------------------

    As noted by the Participants, the trading rotation is effectively a
single price auction to price the option,\74\ and there are no
practical means to include prices on other exchanges in that
auction.\75\ As such, the Commission emphasizes that the exception will
not permit a Participant to declare a trading halt merely to be able to
circumvent the operation of the Options Linkage Plan's Trade-Through
provisions upon reopening; instead, the Commission believes a
Participant must conduct, pursuant to its rules, a formalized and
transparent process for executing orders during reopening after a
trading halt that involves the queuing and ultimate execution of
multiple orders at a single equilibrium price. In addition, a
Participant must have formally declared a trading halt pursuant to its
rules. Therefore, the Commission finds that it is reasonable to include
this as an exception to the general prohibition on Trade-Throughs as it
is in the public interest, appropriate for the protection of investors
and the maintenance of fair and orderly markets,\76\ and believes it
assures fair competition among exchange markets, consistent with
Section 11A(a)(1)(C) of the Act.\77\
---------------------------------------------------------------------------

    \74\ See ISE Letter 2 and NYSE Arca Letter 2, supra note 5; see
also Amex Letter 2, BSE Letter 2, CBOE Letter 2, Nasdaq Letter 2,
and Phlx Letter 2, supra note 7.
    \75\ See ISE Letter 2 and NYSE Arca Letter 2, supra note 5; see
also Amex Letter 2, BSE Letter 2, Nasdaq Letter 2, and Phlx Letter
2, supra note 7.
    \76\ 17 CFR 242.608(b)(2).
    \77\ 15 U.S.C. 78k-1(a)(1)(C).
---------------------------------------------------------------------------

    Crossed Markets: \78\ This exception permits a Participant to trade
through a Protected Quotation when the market is crossed, and
corresponds to an exception for NMS stocks under Regulation NMS.\79\ A
Crossed Market occurs when a Protected Bid is higher than a Protected
Offer in a given options class. The Commission believes that it is
appropriate to permit executions without regard to Trade-Throughs in a
Crossed Market because allowing such transactions should permit the
market to quickly resolve any unintentional crosses. For the foregoing
reasons, the Commission finds that this exception is in the public
interest, appropriate for the protection of investors and the
maintenance of fair and orderly markets,\80\ and believes it assures
fair competition among exchange markets, consistent with Section
11A(a)(1)(C) of the Act.\81\
---------------------------------------------------------------------------

    \78\ Section 5(b)(iii) of the Options Linkage Plan.
    \79\ See Rule 611(b)(4) of Regulation NMS (17 CFR
242.611(b)(4)).
    \80\ 17 CFR 242.608(b)(2).
    \81\ 15 U.S.C. 78k-1(a)(1)(C).
---------------------------------------------------------------------------

    Intermarket Sweep Orders: \82\ The Options Linkage Plan includes
two exceptions from the prohibition against Trade-Throughs for certain
transactions involving ISOs. These two exceptions correspond to the
exceptions relating to ISOs for NMS stocks under Regulation NMS.\83\
First, the Options Linkage Plan permits a Participant to execute orders
marked as ISOs even when the Participant is not at the national best
bid or offer (``NBBO''). Second, a Participant is permitted to execute
a transaction when such transaction is not at the NBBO, provided it
simultaneously ``sweeps'' all better priced Protected Quotations by
routing an ISO to execute against the full displayed size of any
Protected Quotation that was traded through.
---------------------------------------------------------------------------

    \82\ Section 5(b)(iv) and (v) of the Options Linkage Plan.
    \83\ See Rule 611(b)(5) and (6) of Regulation NMS (17 CFR
242.611(b)(5) and (6)).

---------------------------------------------------------------------------

    An ISO is defined as a limit order for an options series that, when
routed to an Eligible Exchange, is identified as an Intermarket Sweep
Order and, simultaneously with the routing of the order, one or more
additional orders, as necessary, are routed to execute against the full
displayed size of any Protected Bid, in the case of a limit order to
sell, or any Protected Offer, in the case of a limit order to buy, for
the options series with a price that is superior to the limit price of
the order.\84\ Any such additional orders would also be marked as ISOs.
---------------------------------------------------------------------------

    \84\ Section 2(9) of the Options Linkage Plan.
---------------------------------------------------------------------------

    The availability of ISOs will allow the Participants to access
multiple price levels simultaneously displayed on the same or multiple
markets, without violating the prohibition against Trade-Throughs. As
the Commission stated with respect to ISOs for stocks under Regulation
NMS, the Commission believes that allowing a Participant to immediately
execute an order identified as an ISO when that exchange is not at the
NBBO is fully consistent with the principle of protecting the best
displayed prices because the exception is premised on the condition
that the market participant sending the ISO has already attempted to
access all better-priced Protected Quotations up to their displayed
size. Consequently, there is no reason why a Participant that receives
an ISO while displaying an inferior-priced quotation should be required
to delay an execution of the order.\85\ This exception should help to
ensure more efficient and faster executions.
---------------------------------------------------------------------------

    \85\ See NMS Release at 37523, supra note 29.
---------------------------------------------------------------------------

    The second ISO Trade-Through exception, under subparagraph (b)(v)
of Section 5 of the Options Linkage Plan, should benefit market
participants in their ability to handle orders efficiently. For
example, market participants should be able to use this exception to
more efficiently execute block trades one or more minimum price
increments away from the NBBO. So long as ISOs are simultaneously
routed to execute against better-priced Protected Quotation on other
markets, the block order could be executed contemporaneously with the
routing of the ISOs.
    The Commission notes that Section 5(c) of the Options Linkage Plan
requires Participants to take reasonable steps to establish that ISOs
are properly routed in an attempt to execute against all applicable
Protected Quotations.
    For the reasons stated above, the Commission finds that the
exception from Trade-Through liability when an exchange or market
participants sends an ISO is in the public interest, appropriate for
the protection of investors and the maintenance of fair and orderly
markets,\86\ and believes it assures fair competition among exchange
markets, consistent with Section 11A(a)(1)(C) of the Act.\87\
---------------------------------------------------------------------------

    \86\ 17 CFR 242.608(b)(2).
    \87\ 15 U.S.C. 78k-1(a)(1)(C).
---------------------------------------------------------------------------

    Quote Flickering: \88\ Subparagraph (b)(vi) of Section 5 of the
Options Linkage Plan sets forth an exception for flickering quotations,
and corresponds to an exception for NMS stocks under Regulation
NMS.\89\ It excepts a transaction if the Eligible Exchange displaying
the Protected Quotation that was traded through had displayed, within
one second prior to execution of the Trade-Through, a Best Bid or Best
Offer, as applicable, for the options series with a price that was
equal or inferior to the price of the Trade-Through transaction.
---------------------------------------------------------------------------

    \88\ Section 5(b)(vi) of the Options Linkage Plan.
    \89\ See Rule 611(b)(8) of Regulation NMS (17 CFR
242.611(b)(8)).
---------------------------------------------------------------------------

    As the Commission stated with respect to the similar exception for
stocks under Regulation NMS,\90\ this exception thereby provides a
``window'' to address false indications of Trade-Throughs that in
actuality are attributable to rapidly moving quotations. It should also
reduce the number of instances in which a Participant must alter its
normal trading procedures and route orders to other trading centers to
comply with the Options Linkage Plan. The exception is thereby intended
to promote more workable intermarket price protection. The Commission
finds it is in the public interest, appropriate for the protection of
investors and the maintenance of fair and orderly markets,\91\ and
believes it assures fair competition among exchange markets, consistent
with Section 11A(a)(1)(C) of the Act.\92\
---------------------------------------------------------------------------

    \90\ See NMS Release at 37536, supra note 29.
    \91\ 17 CFR 242.608(b)(2).
    \92\ 15 U.S.C. 78k-1(a)(1)(C).
---------------------------------------------------------------------------

    Non-Firm Quotes: \93\ This exception, which is carried over from
the Current Plan,\94\ permits a Participant to trade through a
Protected Quotation that was ``Non-Firm.'' \95\ ``Non-Firm'' is defined
to mean, with respect to Quotations in an Eligible Options Class, that
members of a Participant are relieved of their obligations under that
Participant's firm quote rule in that Eligible Options Class.\96\
---------------------------------------------------------------------------

    \93\ Section 5(b)(vii) of the Options Linkage Plan.
    \94\ See Section 8(c)(iii)(C) of the Current Plan.
    \95\ See Section 2(11) of the Options Linkage Plan.
    \96\ The Commission notes that, when quotations in an Eligible
Options Class are Non-Firm, exchange rules require the exchange to
provide notice that its quotations are Non-Firm by appending an
indicator to its quotations. See, e.g., CBOE Rule 43.14(b) and NYSE
Arca Rule 6.86(d)(1)(C).
---------------------------------------------------------------------------

    The Commission believes that Participants should not be required to
protect the price of an away market when that market identifies its
quotes as ``Non-Firm.'' The Commission finds that this exception is in
the public interest, appropriate for the protection of investors and
the maintenance of fair and orderly markets,\97\ and believes it
assures fair competition among exchange markets, consistent with
Section 11A(a)(1)(C).\98\
---------------------------------------------------------------------------

    \97\ 17 CFR 242.608(b)(2).
    \98\ 15 U.S.C. 78k-1(a)(1)(C).
---------------------------------------------------------------------------

    Complex Trades: \99\ This exception carries forward the complex
trade exception in Section 8(c)(iii)(G) of the Current Plan \100\ and
permits a Participant to trade through a Protected Quotation if the
transaction was part of a ``complex trade.'' The definition of
``complex trade'' would be implemented through rules adopted by the
Participants, which would be subject to notice, comment, and Commission
review pursuant to the Section 19(b) rule filing process.
---------------------------------------------------------------------------

    \99\ Section 5(b)(viii) of the Options Linkage Plan.
    \100\ Section 8(c)(iii)(G) of the Current Plan.
---------------------------------------------------------------------------

    Complex trades, such as those submitted by market participants
under the Proposing Exchanges complex order mechanisms,\101\ are
composed of multiple transactions effected at a net price. As the
Proposing Exchanges state,\102\ it is not always practical to require
each leg to be transacted at a price that does not constitute a Trade-
Through, and the Commission believes that permitting an exception for
transactions effected as a portion of a complex trade is appropriate.
By narrowly crafting the definition of complex trades in each
Participants' rules,\103\ the Commission believes that this exception
will not undercut the general Trade-Through protections of the Options
Linkage Plan, and finds it is in the public interest, appropriate for
the protection of investors and the maintenance of fair and orderly
markets,\104\ and believes it assures fair competition among exchange
markets, consistent with Section 11A(a)(1)(C).\105\
---------------------------------------------------------------------------

    \101\ See, e.g., ISE Rule 722.
    \102\ See ISE Letter 2 and NYSE Arca Letter 2, supra note 5; see
also Amex Letter 2, BSE Letter 2, CBOE Letter 2, Nasdaq Letter 2,
and Phlx Letter 2, supra note 7.
    \103\ All changes to rules of national securities exchanges are
subject to notice, comment and Commission review pursuant to Section
19(b) of the Act. 15 U.S.C. 78s(b).
    \104\ 17 CFR 242.608(b)(2).
    \105\ 15 U.S.C. 78k-1(a)(1)(C).

---------------------------------------------------------------------------

    Customer Stopped Orders: \106\ This exception permits a Participant
to trade through a Protected Quotation if the trade executed a
``stopped order.'' The exception requires that the ``stopped order'' be
for the account of a Customer; \107\ that the Customer agreed to the
specified price on an order-by-order basis; and that the price of the
Trade-Through was, for a stopped buy order, lower than the national
Best Bid in the options series at the time of execution, or, for a
stopped sell order, higher than the national Best Offer in the options
series at the time of execution. This exception corresponds to the
customer stopped order exception under Regulation NMS.\108\
---------------------------------------------------------------------------

    \106\ Section 5(b)(ix) of the Options Linkage Plan.
    \107\ ``Customer'' would be defined to mean an individual or
organization that is not a ``Broker/Dealer.'' See Section 2(5) of
the Options Linkage Plan.
    \108\ See Rule 611(b)(9) of Regulation NMS (17 CFR
242.611(b)(9)).
---------------------------------------------------------------------------

    The Commission recognizes that the use of stopped orders is a
valuable tool, particularly for the execution of large orders.\109\ The
Commission believes that this narrowly-drawn exception would give
market participants the ability to execute large Customer orders over
time at a price agreed upon by a Customer, even though the price of the
option may change before the order is executed in its entirety, without
undermining the general principles of price protection under the
Options Linkage Plan. For these reasons, the Commission finds that this
exception is in the public interest, appropriate for the protection of
investors and the maintenance of fair and orderly markets,\110\ and
assures fair competition among exchange markets, consistent with
Section 11A(a)(1)(C) of the Act.\111\
---------------------------------------------------------------------------

    \109\ See NMS Release at 37527, supra note 29.
    \110\ 17 CFR 242.608(b)(2).
    \111\ 15 U.S.C. 78k-1(a)(1)(C).
---------------------------------------------------------------------------

    Stopped Orders and Price Improvement: \112\ This exception permits
a Participant to trade through a Protected Quotation if the transaction
that constituted the Trade-Through was the execution by a Participant
of an order that is stopped at a price that did not constitute a Trade-
Through at the time of the stop. This exception allows a Participant to
seek price improvement for an order, even if the market moves in the
interim, and the transaction ultimately is effected at a price that
would trade through the then currently-displayed market. The rules of
several of the Proposing Exchanges currently contain provisions
relating to price improvement mechanisms.\113\
---------------------------------------------------------------------------

    \112\ Section 5(b)(x) of the Options Linkage Plan.
    \113\ See, e.g., Securities Exchange Act Release No. 50819
(December 8, 2004), 69 FR 75093 (December 15, 2004) (SR-ISE-2003-06)
(approving rules implementing ISE's Price Improvement Mechanism
under ISE Rule 723).
---------------------------------------------------------------------------

    These price improvement mechanisms offer price improvement to
orders received by the exchange during a specified period of time
(``auction''). During this auction period, the NBBO could move from
where it was when the order was received. However, the exchange is only
required to guarantee a price no worse than the NBBO at the time the
order was received. Thus, following the auction, an execution could
result in a Trade-Through if the NBBO improves from the time the order
was received although, had the order been executed at the time of
receipt, the execution would not have resulted in a Trade-Through.
    This exception would allow a Participant to seek price improvement
for an order, even if the market moves in the interim, and the
transaction ultimately is effected at a price that would trade through
the then currently-displayed market. By allowing this exception, the
Commission expects that Participants would be able to continue to use
price improvement mechanisms, thereby offering market participants
potentially better-priced executions. The Commission finds that this
exception is in the public interest, appropriate for the protection of
investors and the maintenance of fair and orderly markets,\114\ and
believes it assures fair competition among exchange markets, consistent
with Section 11A(a)(1)(C) of the Act.\115\
---------------------------------------------------------------------------

    \114\ 17 CFR 242.608(b)(2).
    \115\ 15 U.S.C. 78k-1(a)(1)(C).
---------------------------------------------------------------------------

    Benchmark Trades: \116\ This exception permits a Participant to
trade through a Protected Quotation if the trade was executed at a
price not based directly or indirectly on the quoted price of an
options series at the time of execution and for which the material
terms were not reasonably determinable at the time of the commitment to
make the trade.
---------------------------------------------------------------------------

    \116\ Section 5(b)(xi) of the Options Linkage Plan.
---------------------------------------------------------------------------

    This exception allows a ``benchmark order'' and corresponds to an
exception for NMS stocks under Rule 611 of Regulation NMS.\117\ A
common example of a benchmark order for NMS stocks is a volume-weighted
average price, or ``VWAP,'' order. The Commission notes that none of
the Proposing Exchanges currently permit these types of options trades,
and any Participant seeking to make use of this exception would be
required to submit a proposed rule change which would be subject to
notice, comment and Commission review under Section 19(b) of the Act.
The Commission finds that this exception is in the public interest,
appropriate for the protection of investors and the maintenance of fair
and orderly markets, and believes it assures fair competition among
exchange markets, consistent with Section 11A(a)(1)(C) of the Act.\118\
---------------------------------------------------------------------------

    \117\ See Rule 611(b)(7) of Regulation NMS (17 CFR
242.611(b)(7)).
    \118\ 15 U.S.C. 78k-1(a)(1)(C).
---------------------------------------------------------------------------

B. Locked and Crossed Markets

    The Options Linkage Plan also addresses Locked and Crossed
Markets.\119\ The requirements in the Options Linkage Plan relating to
Locked and Crossed Markets are virtually identical to those applicable
to market centers for NMS stock under Regulation NMS.\120\
---------------------------------------------------------------------------

    \119\ Section 6 of the Options Linkage Plan. A ``Locked Market''
is defined as a quoted market in which a Protected Bid is equal to a
Protected Offer in a series of an Eligible Options Class. See
Section 2(10) of the Options Linkage Plan. A ``Crossed Market'' is
defined as a quoted market in which a Protected Bid is higher than a
Protected Offer in a series of an Eligible Options Class. See
Section 2(4) of the Options Linkage Plan.
    \120\ See Rule 610(d) of Regulation NMS (17 CFR 242.610(d)).
---------------------------------------------------------------------------

    Specifically, the Options Linkage Plan requires each Participant to
establish, maintain, and enforce written rules that require their
members reasonably to avoid displaying Locked and Crossed Markets.\121\
Participants would also be required to establish, maintain, and enforce
written rules reasonably designed to assure the reconciliation of
Locked and Crossed Markets.\122\ Finally, the Options Linkage Plan
would provide that Participants must establish, maintain, and enforce
written rules that prohibit their members from engaging in a pattern or
practice of displaying Locked and Crossed Markets, subject to
exceptions as may be contained in the Participants' rules, as approved
by the Commission.\123\
---------------------------------------------------------------------------

    \121\ Section 6(a) of the Options Linkage Plan.
    \122\ Section 6(b) of the Options Linkage Plan.
    \123\ Section 6(c) of the Options Linkage Plan. The Commission
notes that the proposed rule changes relating to all necessary
implementing rules of the Participants, including those required by
Section 6 of the Options Linkage Plan, would be subject to notice,
comment, and Commission review pursuant to Section 19(b) of the Act.
---------------------------------------------------------------------------

    The Commission recognizes that Section 6 of the Options Linkage
Plan, by restricting Locked Markets, can prohibit the display of an
order that would otherwise have been displayed and reduced the quoted
spread to zero. However, as the Commission stated with respect to
locked markets for stocks under Regulation NMS, the

Commission believes that Locked Markets may not actually represent two
market participants willing to buy and sell at the same price. Instead,
a locking market participant may not truly be willing to trade at the
displayed locking price, but chooses to lock rather than execute
against the already-displayed quotation to receive a liquidity rebate.
The Commission believes that giving priority to the first-displayed
Protected Bid or Protected Offer, particularly when it includes a
public customer's order, will encourage price discovery and contribute
to fair and orderly markets.\124\
---------------------------------------------------------------------------

    \124\ See NMS Release at 37547, supra note 29.
---------------------------------------------------------------------------

    The Options Linkage Plan is designed to ensure that the display of
locked and crossed markets would be restricted, while also recognizing
that locked and crossed markets do occur accidentally and cannot always
be avoided. Thus, the Options Linkage Plan requires that the
Participants have written rules that are reasonably designed to assure
the reconciliation of any lock or cross. Further, the Options Linkage
Plan expressly prohibits a pattern or practice of locking or crossing
away markets.
    In addition, the Options Linkage Plan would allow exceptions to its
general Locked and Crossed Markets provision as might be contained in a
given Participant's rules. As with all proposed rule changes of
national securities exchanges, such rule changes would be subject to
notice, comment and Commission review under Section 19(b)(1) of the
Act.\125\ The Commission believes that these provisions are designed to
ensure that the display of Locked and Crossed Markets will be limited
and that any such display will be promptly reconciled.
---------------------------------------------------------------------------

    \125\ 15 U.S.C. 78s(b)(1).
---------------------------------------------------------------------------

    For the reasons stated above, the Commission finds that the Options
Linkage Plan's provisions relating to Locked and Crossed Markets are in
the public interest, appropriate for the protection of investors and
the maintenance of fair and orderly markets,\126\ and believes they
assure fair competition among exchange markets, consistent with Section
11A(a)(1)(C).\127\
---------------------------------------------------------------------------

    \126\ 17 CFR 242.608(b)(2).
    \127\ 15 U.S.C. 78k-1(a)(1)(C).
---------------------------------------------------------------------------

C. Joining the Proposed Plan

    Any national securities exchange would be eligible to become a
Participant by executing a copy of the Options Linkage Plan and
providing each Participant with a copy of such executed Options Linkage
Plan \128\ if it is: (1) Registered with the Commission in accordance
with Section 6(a) of the Act; (2) a Participant Exchange in OCC; \129\
and (3) a party to the OPRA Plan.\130\ Further, any such national
securities exchange wishing to become a Participant would be required
to file an amendment to the Options Linkage Plan by executing a copy of
the Options Linkage Plan and filing such executed Options Linkage Plan
to the Commission.\131\ Such amendment would be effective when the
amendment is approved by the Commission or otherwise becomes effective
pursuant to Section 11A of the Act and Rule 608 thereunder.\132\ The
Commission finds that this process for joining the Options Linkage Plan
is in the public interest,\133\ and believes it is consistent with
Section 11A(a)(1)(C) because it is designed to ensure that reasonable
procedures are in place to permit additional exchanges to also
participate in the Options Linkage Plan.\134\
---------------------------------------------------------------------------

    \128\ Section 3(c) of the Options Linkage Plan.
    \129\ For a definition of a ``Participant Exchange,'' see
Section VII of the OCC by-laws.
    \130\ For more information on who is a party to the OPRA Plan,
see Section I of the OPRA Plan.
    \131\ Section 4(b) of the Options Linkage Plan.
    \132\ Id. These requirements are identical to those contained in
the Current Plan. See Sections 4(c)(i) and 5(c) of the Current Plan.
The Current Plan also requires that an eligible exchange pay a fee
to join the Current Plan. See Section 4(c)(i)(iv) of the Current
Plan. The Options Linkage Plan does not require an Eligible Exchange
to pay a fee to join the Options Linkage Plan.
    \133\ 17 CFR 242.608(b)(2).
    \134\ 15 U.S.C. 78k-1(a)(1)(C).
---------------------------------------------------------------------------

D. Withdrawal From the Proposed Plan

    Any Participant would be able to withdraw from the Options Linkage
Plan at any time by providing not less than 30 days' prior written
notice to each of the other Participants of such intent to
withdraw.\135\ To withdraw, such Participant also would be required to
effect an amendment to the Options Linkage Plan by submitting such
amended Options Linkage Plan to the Commission for approval.\136\ In
submitting the amended Options Linkage Plan to the Commission, the
Participant proposing to withdraw from the Options Linkage Plan would
be required to state how the Participant plans to accomplish, by
alternate means, the goal of the Options Linkage Plan regarding
limiting Trade-Throughs of prices on other exchanges trading the same
options classes.\137\ Such withdrawal from the Options Linkage Plan
would be effective when the amendment is approved by the Commission or
otherwise becomes effective pursuant to Section 11A of the Act and Rule
608 thereunder. Upon the effectiveness of such withdrawal, the
withdrawing Participant would have no further rights or obligations
under the Options Linkage Plan.
---------------------------------------------------------------------------

    \135\ Section 3(d) of the Options Linkage Plan.
    \136\ Section 4(c) of the Options Linkage Plan.
    \137\ Id. These requirements are identical to those contained in
the Current Plan. See Sections 4(d) and 5(c)(iii) of the Current
Plan.
---------------------------------------------------------------------------

    The Commission finds that these requirements for withdrawal from
the Options Linkage Plan are in the public interest, appropriate for
the protection of investors and the maintenance of fair and orderly
markets,\138\ and believes it assures fair competition among exchange
markets, consistent with Section 11A(a)(1)(C).\139\
---------------------------------------------------------------------------

    \138\ 17 CFR 242.608(b)(2).
    \139\ 15 U.S.C. 78k-1(a)(1)(C).
---------------------------------------------------------------------------

E. Implementation

    The Proposed Plan states that the ``[Participants] shall implement
[the plan] * * * no later than February 27, 2009; provided that, unless
the [Commission] otherwise authorizes, the [Participants] shall not
implement [the plan] until all Eligible Exchanges either (1) have
become parties to [the plan] and the [Commission] has approved all
necessary implementing rules or (2) have developed the ability to
accept and execute incoming Intermarket Sweep Orders.'' \140\
---------------------------------------------------------------------------

    \140\ See Section 7 of the Proposed Plan.
---------------------------------------------------------------------------

    To provide clarity to market participants regarding the
implementation date of the plan, the Commission, after consultation
with the Proposing Exchanges, has modified the Proposed Plan to change
the implementation date in Section 7 from February 27, 2009 to August
31, 2009. In addition, the Commission notes that all seven options
exchanges \141\ have joined in filing the Proposed Plan with the
Commission, and each has submitted proposed rule changes pursuant to
Section 19(b) of the Act to modify its rules to comply with the Options
Linkage Plan.\142\ The Commission believes that the provision that
would permit the plan to be implemented if an Eligible Exchange
``developed the ability to accept and execute incoming Intermarket
Sweep Orders,'' even if such exchange had not become a party to the
plan is no longer necessary because all seven options exchanges have
joined the Options

Linkage Plan and therefore will, upon implementation of the Options
Linkage Plan, accept and execute ISOs.
---------------------------------------------------------------------------

    \141\ That is, CBOE, ISE, Nasdaq, BX, Phlx, Amex and NYSE Arca.
    \142\ See, e.g., Securities Exchange Act Release Nos. 60014
(June 1, 2009); and 74 FR 27224 (June 8, 2009) (SR-ISE-2009-27) and
60015 (June 1, 2009); 74 FR 27375 (June 9, 2009) (SR-NYSEAmex-2009-
19) which propose rules such as provisions that contain relevant
definitions, an order protection rule, and a locked and crossed
market rule, which correspond to the provisions in the Options
Linkage Plan.
---------------------------------------------------------------------------

    The Commission finds that these modifications to Section 7 of the
Proposed Plan are necessary and appropriate and will further the
purposes of the Act by providing clarity to market participants
regarding the implementation of the plan while providing appropriate
time to self-regulatory organizations to prepare for implementation.
    With these modifications, unless the Commission otherwise
authorizes, the plan may only be implemented by the Proposing Exchanges
when all Proposing Exchanges' proposed rule changes containing the
necessary implementing rules \143\ have been approved by the
Commission.
---------------------------------------------------------------------------

    \143\ See id.
---------------------------------------------------------------------------

IV. Conclusion

    It is hereby ordered, that pursuant to Section 11A(a)(3)(B) of the
Act \144\ and Rule 608 thereunder,\145\ that the Proposed Plan
submitted by CBOE, ISE, Nasdaq, BX, Phlx, Amex, and NYSE Arca, as
modified herein, is approved and declared effective,\146\ and that
CBOE, ISE, Nasdaq, BX, Phlx, Amex, and NYSE Arca are authorized to act
jointly to implement the Options Order Protection and Locked/Crossed
Market Plan as a means of facilitating a national market system.
---------------------------------------------------------------------------

    \144\ 15 U.S.C. 78k-1(a)(3)(B).
    \145\ 17 CFR 242.608.
    \146\ The approved Plan is attached here as Appendix A.

    By the Commission.
Florence E. Harmon,
Deputy Secretary.

Appendix A

Options Order Protection and Locked/Crossed Market Plan

Section 1--Preamble

    The Participants submit to the SEC this Plan providing a
framework for order protection and addressing Locked and Crossed
Markets in Eligible Options Classes. The purpose of the Plan is to
enable the Participants to act jointly in establishing a framework
for providing order protection and addressing Locked and Crossed
Markets in Eligible Options Classes. In addition, the Plan provides
for a non-exclusive method for achieving order protection and
addressing Locked and Crossed Markets. The Participants will submit
to the SEC for approval their respective rules that will implement
the framework of the Plan. The Participants request that the SEC
issue an order pursuant to Section 11A(a)(3)(B) of the Exchange Act
and Rule 608 thereunder evidencing its approval of the Plan.

Section 2--Definitions

    (1) ``Best Bid'' and ``Best Offer'' mean the highest priced Bid
and the lowest priced Offer.
    (2) ``Bid'' or ``Offer'' means the bid price or the offer price
communicated by a member of an Eligible Exchange to any Broker/
Dealer, or to any customer, at which it is willing to buy or sell,
as either principal or agent, but shall not include indications of
interest.
    (3) ``Broker/Dealer'' means an individual or organization
registered with the SEC in accordance with Section 15(b)(1) of the
Exchange Act or a foreign broker or dealer exempt from such
registration pursuant to Rule 15a-6 under the Exchange Act.
    (4) ``Crossed Market'' means a quoted market in which a
Protected Bid is higher than a Protected Offer in a series of an
Eligible Class.
    (5) ``Customer'' means an individual or organization that is not
a Broker/Dealer.
    (6) ``Eligible Exchange'' means a national securities exchange
registered with the SEC in accordance with Section 6(a) of the
Exchange Act that: (a) As a Participant Exchange in OCC (as that
term is defined in Section VII of the OCC by-laws); (b) is a party
to the OPRA Plan (as that term is described in Section I of the OPRA
Plan); and (c) if the national securities exchange chooses not to
become a party to this Plan, is a participant in another plan
approved by the Commission providing for comparable Trade-Through
and Locked and Crossed Market protection.
    (7) ``Eligible Options Class'' means all option series overlying
a security (as that term is defined in Section 3(a)(10) of the
Exchange Act) or group of securities, including both put options and
call options, which class is available for trading on two or more
Eligible Exchanges.
    (8) ``Exchange Act'' means the Securities Exchange Act of 1934,
as amended.
    (9) ``Intermarket Sweep Order (ISO)'' means a limit order for an
options series that meets the following requirements:
    (a) When routed to an Eligible Exchange, the order is identified
as an ISO;
    (b) Simultaneously with the routing of the order, one or more
additional ISOs, as necessary, are routed to execute against the
full displayed size of any Protected Bid, in the case of a limit
order to sell, or any Protected Offer, in the case of a limit order
to buy, for the options series with a price that is superior to the
limit price of the ISO, with such additional orders also marked as
ISOs.
    (10) ``Locked Market'' means a quoted market in which a
Protected Bid is equal to a Protected Offer in a series of an
Eligible Options Class.
    (11) ``Non-Firm'' means, with respect to Quotations in an
Eligible Options Class, that members of a Participant are relieved
of their obligations under that Participant's firm quote rule in
that Eligible Options Class.
    (12) ``OCC'' means The Options Clearing Corporation.
    (13) ``OPRA'' means the Options Price Reporting Authority.
    (14)''OPRA Plan'' means the plan filed with the SEC pursuant to
Section 11Aa(1)(C)(iii) of the Exchange Act, approved by the SEC and
declared effective as of January 22, 1976, as from time to time
amended.
    (15) ``Participant'' means an Eligible Exchange whose
participation in the Plan has become effective pursuant to Section
3(c) of the Plan.
    (16) ``Plan'' means the plan amended and restated in this
instrument as from time to time amended in accordance with its
provisions.
    (17) ``Protected Bid'' or ``Protected Offer'' means a Bid or
Offer in an options series, respectively, that:
    a. Is displayed by an Eligible Exchange;
    b. Is disseminated pursuant to the OPRA Plan; and
    c. Is the Best Bid or Best Offer, respectively, of an Eligible
Exchange.
    (18) ``Protected Quotation'' means a Protected Bid or Protected
Offer.
    (19) ``Quotation'' means a Bid or Offer.
    (20) ``SEC'' means the United States Securities and Exchange
Commission.
    (21) ``Trade-Through'' means a transaction in an options series,
either as principal or agent, at a price that is lower than a
Protected Bid or higher than a Protected Offer.

Section 3--Parties to the Plan

    (a) List of Parties
    The parties to the Plan are as follows:

    Boston Stock Exchange, Inc., registered as a national securities
exchange under the Exchange Act and having its principal place of
business at 100 Franklin Street, Boston, Massachusetts 02110.
    Chicago Board Options Exchange, Incorporated, registered as a
national securities exchange under the Exchange Act and having its
principal place of business at 400 South LaSalle Street, Chicago,
Illinois 60605.
    International Securities Exchange, LLC, registered as a national
securities exchange under the Exchange Act and having its principal
place of business at 60 Broad Street, New York, New York 10004.
    The NASDAQ Stock Market LLC, registered as a national securities
exchange under the Exchange Act and having its principal place of
business at One Liberty Plaza, 50th Floor, New York, New York 10006.
    NASDAQ OMX PHLX, Inc., registered as a national securities
exchange under the Exchange Act and having its principal place of
business at 1900 Market Street, Philadelphia, Pennsylvania 19103.
    NYSE Alternext US LLC, registered as a national securities
exchange under the Exchange Act and having its principal place of
business at 11 Wall Street, New York, NY 10005.
    NYSE Arca, Inc., registered as a national securities exchange
under the Exchange Act and having its principal place of business at
100 South Wacker Drive, Suite 1800, Chicago, IL 60606.

    (b) Compliance Undertaking
    By subscribing to and submitting the Plan for filing with the
SEC, each Participant agrees to enforce compliance by its members
with the provisions of the Plan.
    (c) Entry of New Participants
    The Participants agree that any other Eligible Exchange may
become a Participant by: (i) Executing a copy of the Plan, as then
in effect; (ii) providing each then-current

Participant with a copy of such executed Plan; and (iii) effecting
an amendment to the Plan as specified in Section 4(b) of the Plan.
    (d) Withdrawal from the Plan
    Any Participant may withdraw from the Plan at any time by: (i)
Providing not less than 30 days' prior written notice to each of the
other Participants of such intent to withdraw; and (ii) effecting an
amendment to the Plan as specified in Section 4(c) of the Plan. Upon
the effectiveness of such withdrawal the withdrawing Participant
shall have no further rights or obligations whatsoever under the
Plan.

Section 4--Amendments to the Plan

    (a) General Amendment Authority
    Except with respect to:
    (i) the addition of new Participants to the Plan; and
    (ii) the withdrawal of a Plan Participant,

any proposed change in, addition to, or deletion from the Plan may
be effected only by means of a written amendment to the Plan that is
unanimously approved by the Participants and that: (A) sets forth
the change, addition or deletion; (B) is executed on behalf of each
Participant; and (C) is approved by the SEC or otherwise becomes
effective pursuant to Section 11A of the Exchange Act and Rule 608
thereunder.
    (b) New Participants
    With respect to new Participants, an amendment to the Plan may
be effected by a new Eligible Exchange executing a copy of the Plan,
as then in effect (with the only change being the addition of the
new Participant's name in Section 3(a) of the Plan), and submitting
such executed Plan to the SEC. Such amendment will be effective when
the amendment is approved by the SEC or otherwise becomes effective
pursuant to Section 11A of the Exchange Act and Rule 608 thereunder.
    (c) Withdrawal from the Plan
    A Participant seeking to withdraw from the Plan shall effect an
amendment to the Plan as then in effect (with the only change being
the deletion of the Participant's name in Section 3(a) of the Plan)
by submitting such amended Plan to the SEC for approval. In
submitting the amended Plan to the SEC, the Participant proposing to
withdraw from the Plan shall state how the Participant plans to
accomplish, by alternate means, the goal of the Plan regarding
limiting Trade-Throughs of prices on other exchanges trading the
same options classes. Such withdrawal from the Plan shall be
effective when the amendment is approved by the SEC or otherwise
becomes effective pursuant to Section 11A of the Exchange Act and
Rule 608 thereunder.

Section 5--Order Protection

    (a) Order Protection
    (i) Prevention of Trade-Throughs. Each Participant agrees that
it shall establish, maintain and enforce written policies and
procedures as approved by the SEC that are reasonably designed to
prevent Trade-Throughs in that Participant's market in Eligible
Options Classes that do not fall within an exception set forth in
paragraph (b) below, and, if relying on such exception, that are
reasonably designed to assure compliance with the terms of the
exception.
    (ii) Surveillance. Each Participant agrees to conduct
surveillance of its market on a regular basis to ascertain the
effectiveness of the policies and procedures required by paragraph
(a)(1) of this section, and to take prompt action to remedy
deficiencies in such policies and procedures.
    (b) Exceptions.
    (i) The transaction that constituted the Trade-Through was
effected when the Eligible Exchange displaying the Protected
Quotation that was traded through was experiencing a failure,
material delay, or malfunction it its systems or equipment;
    (ii) The transaction traded through a Protected Quotation being
disseminated by an Eligible Exchange during a trading rotation;
    (iii) The transaction that constituted the Trade-Through
occurred when there was a Crossed Market;
    (iv) The transaction that constituted the Trade-Through was the
execution of an order identified as an Intermarket Sweep Order;
    (v) The transaction that constituted the Trade-Through was
effected by a Participant that simultaneously routed an Intermarket
Sweep Order to execute against the full displayed size of any
Protected Quotation that was traded through;
    (vi) The Eligible Exchange displaying the Protected Quotation
that was traded through had displayed, within one second prior to
execution of the Trade-Through, a Best bid or Best offer, as
applicable, for the options series with a price that was equal or
inferior to the price of the Trade-Through transaction;
    (vii) The Protected Quotation traded through was being
disseminated from an Eligible Exchange whose Quotations were Non-
Firm with respect to such options series;
    (viii) The transaction that constituted the Trade-Through was
effected as a portion of a ``complex trade,'' as defined in the
rules of a Participant;
    (ix) The transaction that constituted the Trade-Through was the
execution by a Participant of an order for which, at the time of
receipt of the order, a member of the Participant had guaranteed an
execution at no worse than a specified price (a ``stopped order''),
where:
    (A) The stopped order was for the account of a Customer;
    (B) the Customer agreed to the specified price on an order-by-
order basis; and
    (C) the price of the Trade-Through was, for a stopped buy order,
lower than the national Best Bid in the options series at the time
of execution, or, for a stopped sell order, higher than the national
Best Offer in the options series at the time of execution;
    (x) The transaction that constituted the Trade-Through was the
execution by a Participant of an order which was stopped at a price
that did not Trade-Through another Eligible Exchange at the time of
the stop; or
    (xi) The transaction that constituted the Trade-Through was the
execution of an order at a price that was not based, directly or
indirectly, on the quoted price of the options series at the time of
execution and for which the material terms were not reasonably
determinable at the time the commitment to execute the order was
made.
    (c) Intermarket Sweep Orders. Participants shall take reasonable
steps to establish that Intermarket Sweep Orders meet the
requirements of Section 2(9) of the Plan.

Section 6--Locked and Crossed Markets

    The Participants agree that they shall establish, maintain and
enforce written rules that:
    (a) Require their members reasonably to avoid displaying Locked
and Crossed Markets;
    (b) Are reasonably designed to assure the reconciliation of
Locked and Crossed Markets; and
    (c) Prohibit its members from engaging in a pattern or practice
of displaying Locked and Crossed Markets;

in all cases subject to such exceptions as may be contained in the
rules of a Participant approved by the Commission.

Section 7--Implementation

    The Parties shall implement this Plan on a date upon which all
Parties agree, but no later than August 31, 2009; provided that,
unless the SEC otherwise authorizes, the Parties shall not implement
this Plan unless all Eligible Exchanges have become parties to this
Plan and the SEC has approved all necessary implementing rules.

Section 8--Counterparts and Signatures

    The Plan may be executed in any number of counterparts, no one
of which need contain all signatures of all Participants, and as
many of such counterparts as shall together contain all such
signatures shall constitute one and the same instrument.

    In Witness Whereof, this Plan has been executed as of the ------
2009 by each of the parties hereto.

CHICAGO BOARD OPTIONS EXCHANGE, INCORPORATED
By:--------------------------------------------------------------------
Date:------------------------------------------------------------------

INTERNATIONAL SECURITIES EXCHANGE, LLC

By:--------------------------------------------------------------------
Date:------------------------------------------------------------------

The NASDAQ STOCK MARKET LLC

By:--------------------------------------------------------------------
Date:------------------------------------------------------------------

NASDAQ OMX BX, INC.

By:--------------------------------------------------------------------
Date:------------------------------------------------------------------

NASDAQ OMX PHLX, Inc.

By:--------------------------------------------------------------------
Date:------------------------------------------------------------------

NYSE AMEX LLC
By:--------------------------------------------------------------------
Date:------------------------------------------------------------------

NYSE ARCA, INC.
By:--------------------------------------------------------------------
Date:------------------------------------------------------------------

[FR Doc. E9-18763 Filed 8-5-09; 8:45 am]

BILLING CODE 8010-01-P