Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating To Reduce the Value of PHLX Housing SectorSM, 57919-57921 [05-19806]
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Federal Register / Vol. 70, No. 191 / Tuesday, October 4, 2005 / Notices
it does not minimize the importance of
compliance with these rules and all
other rules subject to the imposition of
fines under the Exchange’s MRP. The
Exchange relies on its MRP as a tool to
address enumerated violations to
provide the Exchange with greater
flexibility in addressing violations that
may not require formal disciplinary
proceedings. Under the proposed rule
change, the Exchange’s Enforcement
Department would continue to exercise
its discretion under PCX Rule 10.12(f)
and pursue certain cases as a formal
disciplinary matter under PCX Rule 10.4
to the extent that the facts or
circumstances warrant such action.6
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,7 in general, and
furthers the objectives of Section 6(b)(5)
of the Act,8 in particular, in that it
would promote just and equitable
principles of trade, facilitate
transactions in securities, remove
impediments to and perfect the
mechanisms of a free and open market
and a national market system, and
protect investors and the public interest.
The proposal is also consistent with,
and furthers the objectives of, Sections
6(b)(6) and 6(b)(7) of the Act 9 in that it
would help ensure that members and
persons associated with members are
appropriately disciplined for violations
of the Act, the rules and regulations
thereunder, and the rules of the
Exchange, and provide a fair procedure
for disciplining members and persons
associated with members.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change would impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Within 35 days of the date of
publication of this notice in the Federal
6 See
supra note 5.
U.S.C. 78f(b).
8 15 U.S.C. 78f(b)(5).
9 15 U.S.C. 78f(b)(6) and (7).
7 15
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16:55 Oct 03, 2005
Jkt 205001
Register or within such longer period (i)
as the Commission may designate up to
90 days of such date if it finds such
longer period to be appropriate and
publishes its reasons for so finding or
(ii) as to which the self-regulatory
organization consents, the Commission
will:
(A) By order approve such proposed
rule change, or
(B) Institute proceedings to determine
whether the proposed rule change
should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change, as amended, is consistent with
the Act. Comments may be submitted by
any of the following methods:
Electronic comments
Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–PCX–2005–98 on the
subject line.
57919
should submit only information that
you wish to make available publicly. All
submissions should refer to File
Number SR–PCX–2005–98 and should
be submitted on or before October 25,
2005.
For the Commission by the Division of
Market Regulation, pursuant to delegated
authority.10
Jonathan G. Katz,
Secretary.
[FR Doc. 05–19807 Filed 10–3–05; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–52512; File No. SR–Phlx–
2005–50]
Self-Regulatory Organizations;
Philadelphia Stock Exchange, Inc.;
Notice of Filing and Immediate
Effectiveness of a Proposed Rule
Change Relating To Reduce the Value
of PHLX Housing SectorSM Index
Options by Half
September 27, 2005.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
Paper comments
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
• Send paper comments in triplicate
notice is hereby given that on
to Jonathan G. Katz, Secretary,
September 15, 2005, the Philadelphia
Securities and Exchange Commission,
Stock Exchange, Inc. (‘‘Phlx’’ or
Station Place, 100 F Street, NE.,
‘‘Exchange’’) filed with the Securities
Washington, DC 20549–9303.
and Exchange Commission (‘‘SEC’’ or
All submissions should refer to File
‘‘Commission’’) the proposed rule
Number SR–PCX–2005–98. This file
change as described in Items I and II
number should be included on the
below, which Items have been prepared
subject line if e-mail is used. To help the by the Phlx. The Phlx filed the proposal
Commission process and review your
pursuant to Section 19(b)(3)(A) under
comments more efficiently, please use
the Act,3 and Rule 19b–4(f)(6)
only one method. The Commission will thereunder,4 which renders the proposal
post all comments on the Commission’s effective upon filing with the
Internet Web site
Commission. The Commission is
(https://www.sec.gov/rules/sro.shtml).
publishing this notice to solicit
Copies of the submission, all subsequent comments on the proposed rule change
amendments, all written statements
from interested persons.
with respect to the proposed rule
I. Self-Regulatory Organization’s
change that are filed with the
Statement of the Terms of Substance of
Commission, and all written
the Proposed Rule Change
communications relating to the
proposed rule change between the
The Phlx proposes to reduce the value
Commission and any person, other than of its PHLX Housing SectorSM Index
those that may be withheld from the
(‘‘Index’’) option (‘‘HGX’’) 5 to one-half
public in accordance with the
10 17 CFR 200.30–3(a)(12).
provisions of 5 U.S.C. 552, will be
1 15 U.S.C. 78s(b)(1).
available for inspection and copying in
2 17 CFR 240.19b–4.
the Commission’s Public Reference
3 15 U.S.C. 78s(b)(3)(A).
Section, 100 F Street, NE., Washington,
4 17 CFR 240.19b–4(f)(6).
DC 20549. Copies of such filing also will
5 The PHLX Housing SectorSM (HGXSM) is a
be available for inspection and copying
modified capitalization-weighted index composed
of 21 companies whose primary lines of business
at the principal offices of the Exchange.
are directly associated with the U.S. housing
All comments received will be posted
construction market. The index composition
without change; the Commission does
encompasses residential builders, suppliers of
not edit personal identifying
aggregate, lumber and other construction materials,
Continued
information from submissions. You
PO 00000
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E:\FR\FM\04OCN1.SGM
04OCN1
57920
Federal Register / Vol. 70, No. 191 / Tuesday, October 4, 2005 / Notices
its present value by multiplying by two
the base market divisor used to calculate
the Index. In addition, the option
contract position and exercise limits
applicable to the HGX (currently 31,500
contracts per Rule 1001A) will be
increased to 63,000 contracts until all
pre-split option contracts expire.6
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of
and basis for the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of these statements may be examined at
the places specified in Item IV below.
The Phlx has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of the proposed rule
change is to do a two-for-one split of the
Index to reduce its value by half. A twofor-one split should have a positive
effect on overall transaction volumes of
options on the Index by attracting
additional liquidity and making option
premiums more attractive for retail
investors. A split would allow investors
to better utilize the HGX as a trading
and hedging vehicle with a smaller
capital outlay.
HGX was listed on the Exchange and
commenced trading on or about July 17,
2002,7 and has continued trading. As of
July 3, 2005, the Index value was
$571.75 and the near-month at-themanufactured housing and mortgage insurers. The
Index is currently composed of the following
stocks: American Standard Companies, Beazer
Homes USA, Inc., Champion Enterprises, Inc.,
Centex Corp., DR Horton, Inc., Hovnanian
Enterprises, Inc., KB Home, Lennar Corp., Masco
Corp., MDC Holdings, Inc., OfficeMax, Inc., Pulte
Homes, PMI Group, Inc., Radian Group, Inc.,
Ryland Group, Inc., Standard Pacific Corp., Temple
Inland, Inc., Toll Brothers, Inc., USG Corp., Vulcan
Materials Company, and Weyerhaeuser Company.
6 Phlx Rule 1002A indicates that exercise limits
for index option contracts shall be equivalent to the
position limits described in Phlx Rule 1001A.
7 HGX was listed for trading pursuant to Section
19b–4(e) on July 17, 2002. The initial index value
of HGX was established on or about January 2,
2002, at $250 by dividing the total market value of
all HGX components by a divisor to reach the $250
valuation. The HGX index value has increased
substantially with the increase in the total market
value of the HGX components, leading to the
proposed market value split that will be achieved
by increasing the divisor.
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16:55 Oct 03, 2005
Jkt 205001
money call premium was $12.50 per
contract. The Exchange’s proposed
‘‘two-for-one split’’ of the Index would
reduce the Index value to one-half of its
current value, or $285.88; the options
premium would likewise be reduced by
half. In order to maintain economic
equivalence pre and post-split, however,
the number of HGX contracts will be
increased two-fold for current contract
holders, such that for each HGX contract
currently held, the holder would receive
two contracts at the reduced post-split
value, each with a strike price equal to
one-half of the original strike price. For
example, the holder of one HGX 570 call
with a premium of $12.50 would receive
two HGX 285 calls with a premium of
$6.25.
In addition, the position limits
applicable to HGX, which are currently
31,500 contracts per Rule 1001A, would
be increased to 63,000 until such time
that all pre-split options expire, at
which point the position limits would
return to the 31,500 position limit
specified in Phlx Rule 1001A. This is
being done to accommodate the twofold increase in the number of contracts
outstanding. By operation of Phlx Rule
1002A, exercise limits would be
equivalent to the position limits
established in Phlx Rule 1001A. The
proposed rule change process is similar
to what has been previously employed
pursuant to an index value split.8 The
trading symbol would remain HGX.
In conjunction with the proposed
split, the Exchange would continue to
list strike price intervals surrounding
the new lower Index value pursuant to
Phlx Rule 1101A, which will not change
pursuant to this proposal. The Exchange
would announce the effective date of
the split by way of an Exchange
memorandum to the membership,
which would also serve as notice of the
strike price and position limit changes.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,9 in general, and
furthers the objectives of Section 6(b)(5)
of the Act,10 in particular, in that it is
designed to promote just and equitable
principles of trade and to remove
impediments to and perfect the
mechanism of a free and open market
and a national market system, and, in
8 See Securities Exchange Act Release No. 42814
(May 23, 2000), 65 FR 35152 (June 1, 2000) (SR–
Phlx–00–11) (two-for-one split of index value
resulted in a doubling of the applicable position
and exercise limits until the last expiration month
expired or traded out, and then reverted to pre-split
levels).
9 15 U.S.C. 78f(b).
10 15 U.S.C. 78f(b)(5).
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Frm 00068
Fmt 4703
Sfmt 4703
general, to protect investors and the
public interest, by establishing a lower
Index value, which should, in turn,
facilitate trading in HGX, creating a
more liquid trading environment. The
Exchange believes that reducing the
value of the Index should not raise
manipulation concerns and should not
cause adverse market impact because
the Exchange will continue to employ
its surveillance procedures and has
proposed an orderly procedure to
achieve the Index split, including
adequate prior notice to market
participants.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any inappropriate burden on
competition.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received from
Members, Participants or Others
No written comments were either
solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Phlx has filed the proposed rule
change pursuant to Section 19(b)(3)(A)
of the Act 11 and subparagraph (f)(6) of
Rule 19b-4 thereunder.12 Because the
foregoing proposed rule change: (1)
Does not significantly affect the
protection of investors or the public
interest; (2) does not impose any
significant burden on competition; and
(3) does not become operative for 30
days from the date of filing, or such
shorter time as the Commission may
designate if consistent with the
protection of investors and the public
interest, the proposed rule change has
become effective pursuant to Section
19(b)(3)(A) of the Act and Rule 19b–
4(f)(6) thereunder. As required under
Rule 19b–4(f)(6)(iii), the Phlx provided
the Commission with written notice of
its intent to file the proposed rule
change at least five business days prior
to filing the proposal with the
Commission or such shorter period as
designated by the Commission.
A proposed rule change filed under
Rule 19b–4(f)(6) normally does not
become operative prior to 30 days after
the date of filing. However, Rule 19b–
4(f)(6)(iii) permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest. The
11 15
12 17
E:\FR\FM\04OCN1.SGM
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
04OCN1
Federal Register / Vol. 70, No. 191 / Tuesday, October 4, 2005 / Notices
Exchange has requested that the
Commission waive the 30-day operative
delay specified in Rule 19b–4(f)(6), so
that all options traded on the indexes
can be treated uniformly.13
The Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest.14
Specifically, the Commission believes
that the Phlx’s proposal raises no new
issues or regulatory concerns that the
Commission did not consider in
approving a similar proposal of a twofor-one split.15 Additionally, the
Commission notes that the Exchange
will continue to employ its surveillance
procedures and has proposed an orderly
procedure to achieve the Index split,
including adequate prior notice to
market participants. For these reasons,
the Commission designates that the
proposal become operative immediately.
At any time within 60 days of the
filing of such proposed rule change, the
Commission may summarily abrogate
such rule change if it appears to the
Commission that such action is
necessary or appropriate in the public
interest, for the protection of investors,
or otherwise in furtherance of the
purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an E-mail to rulecomments@sec.gov. Please include File
Number SR–Phlx–2005–50 on the
subject line.
Paper comments
• Send paper comments in triplicate
to Jonathan G. Katz, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–9303.
13 The
Exchange plans to issue a memorandum to
membership announcing an effective date of the
split that is prior to expiration of the 30-day
operative period. Telephone conversation between
Jurij Trypupenko, Director, Phlx, and Florence
Harmon, Senior Special Counsel, Commission, on
September 26, 2005.
14 For purposes only of waiving the operative
delay for this proposal, the Commission has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. 15
U.S.C. 78c(f).
15 See supra, note 8.
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16:55 Oct 03, 2005
Jkt 205001
All submissions should refer to File
Number SR–Phlx–2005–50. This file
number should be included on the
subject line if e-mail is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for inspection and copying in
the Commission’s Public Reference
Section, 100 F Street, NE., Washington,
DC 20549. Copies of this filing also will
be available for inspection and copying
at the principal office of the Phlx. All
comments received will be posted
without change; the Commission does
not edit personal identifying
information from submissions. You
should submit only information that
you wish to make available publicly. All
submissions should refer to File
Number SR–Phlx–2005–50 and should
be submitted on or before October 25,
2005.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.16
Jonathan G. Katz,
Secretary.
[FR Doc. 05–19806 Filed 10–3–05; 8:45 am]
BILLING CODE 8010–01–P
57921
Submit completed loan
applications to: U.S. Small Business
Administration, Disaster Area Office 3,
14925 Kingsport Road Fort Worth, TX
76155.
ADDRESSES:
A.
Escobar, Office of Disaster Assistance,
U.S. Small Business Administration,
409 3rd Street, Suite 6050, Washington,
DC 20416.
SUPPLEMENTARY INFORMATION: Notice is
hereby given that as a result of the
President’s major disaster declaration on
09/24/2005, applications for disaster
loans may be filed at the address listed
above or other locally announced
locations.
The following areas have been
determined to be adversely affected by
the disaster:
Primary Parishes:
Beauregard, Calcasieu, Cameron,
Jefferson Davis, and Vermilion.
Contiguous Parishes/Counties:
Louisiana:
Acadia, Allen, Evangeline, Iberia,
Lafayette, and Vernon. Texas:
Jefferson, Newton, and Orange.
The Interest Rates are:
FOR FURTHER INFORMATION CONTACT:
Percent
Homeowners With Credit Available Elsewhere: ........................
Homeowners
Without
Credit
Available Elsewhere: .................
Businesses With Credit Available
Elsewhere: ................................
Businesses & Small Agricultural
Cooperatives Without Credit
Available Elsewhere: .................
Other (Including Non-Profit Organizations) With Credit Available
Elsewhere: ................................
Businesses and Non-Profit Organizations Without Credit Available Elsewhere .........................
5.375
2.687
6.557
4.000
4.750
4.000
SMALL BUSINESS ADMINISTRATION
[Disaster Declaration #10205 and #10206]
Louisiana Disaster #LA–00004
U.S. Small Business
Administration
ACTION: Notice.
AGENCY:
SUMMARY: This is a Notice of the
Presidential declaration of a major
disaster for the State of Louisiana
(FEMA–1607–DR), dated 09/24/2005.
Incident: Hurricane Rita.
Incident Period: 09/23/2005 and
continuing.
Effective Date: 09/24/2005.
Physical Loan Application Deadline
Date: 11/23/2005.
EIDL Loan Application Deadline Date:
06/26/2006.
16 17
PO 00000
CFR 200.30–3(a)(12).
Frm 00069
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The number assigned to this disaster for
physical damage is 102058 and for economic
injury is 102060. (Catalog of Federal
Domestic Assistance Numbers 59002 and
59008)
Herbert L. Mitchell,
Associate Administrator for Disaster
Assistance.
[FR Doc. 05–19835 Filed 10–3–05; 8:45 am]
BILLING CODE 8025–01–P
SMALL BUSINESS ADMINISTRATION
[Disaster Declaration #10203 and #10204]
Texas Disaster #TX–00066
U.S. Small Business
Administration.
ACTION: Notice.
AGENCY:
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]]>Agencies
[Federal Register Volume 70, Number 191 (Tuesday, October 4, 2005)]
[Notices]
[Pages 57919-57921]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-19806]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-52512; File No. SR-Phlx-2005-50]
Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
Relating To Reduce the Value of PHLX Housing Sector\SM\ Index Options
by Half
September 27, 2005.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on September 15, 2005, the Philadelphia Stock Exchange, Inc. (``Phlx''
or ``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I and II below, which Items have been prepared by the Phlx. The
Phlx filed the proposal pursuant to Section 19(b)(3)(A) under the
Act,\3\ and Rule 19b-4(f)(6) thereunder,\4\ which renders the proposal
effective upon filing with the Commission. The Commission is publishing
this notice to solicit comments on the proposed rule change from
interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Phlx proposes to reduce the value of its PHLX Housing
Sector\SM\ Index (``Index'') option (``HGX'') \5\ to one-half
[[Page 57920]]
its present value by multiplying by two the base market divisor used to
calculate the Index. In addition, the option contract position and
exercise limits applicable to the HGX (currently 31,500 contracts per
Rule 1001A) will be increased to 63,000 contracts until all pre-split
option contracts expire.\6\
---------------------------------------------------------------------------
\5\ The PHLX Housing Sector\SM\ (HGX\SM\) is a modified
capitalization-weighted index composed of 21 companies whose primary
lines of business are directly associated with the U.S. housing
construction market. The index composition encompasses residential
builders, suppliers of aggregate, lumber and other construction
materials, manufactured housing and mortgage insurers. The Index is
currently composed of the following stocks: American Standard
Companies, Beazer Homes USA, Inc., Champion Enterprises, Inc.,
Centex Corp., DR Horton, Inc., Hovnanian Enterprises, Inc., KB Home,
Lennar Corp., Masco Corp., MDC Holdings, Inc., OfficeMax, Inc.,
Pulte Homes, PMI Group, Inc., Radian Group, Inc., Ryland Group,
Inc., Standard Pacific Corp., Temple Inland, Inc., Toll Brothers,
Inc., USG Corp., Vulcan Materials Company, and Weyerhaeuser Company.
\6\ Phlx Rule 1002A indicates that exercise limits for index
option contracts shall be equivalent to the position limits
described in Phlx Rule 1001A.
---------------------------------------------------------------------------
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of and basis for the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of these statements may be examined at
the places specified in Item IV below. The Phlx has prepared summaries,
set forth in sections A, B, and C below, of the most significant
aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of the proposed rule change is to do a two-for-one
split of the Index to reduce its value by half. A two-for-one split
should have a positive effect on overall transaction volumes of options
on the Index by attracting additional liquidity and making option
premiums more attractive for retail investors. A split would allow
investors to better utilize the HGX as a trading and hedging vehicle
with a smaller capital outlay.
HGX was listed on the Exchange and commenced trading on or about
July 17, 2002,\7\ and has continued trading. As of July 3, 2005, the
Index value was $571.75 and the near-month at-the-money call premium
was $12.50 per contract. The Exchange's proposed ``two-for-one split''
of the Index would reduce the Index value to one-half of its current
value, or $285.88; the options premium would likewise be reduced by
half. In order to maintain economic equivalence pre and post-split,
however, the number of HGX contracts will be increased two-fold for
current contract holders, such that for each HGX contract currently
held, the holder would receive two contracts at the reduced post-split
value, each with a strike price equal to one-half of the original
strike price. For example, the holder of one HGX 570 call with a
premium of $12.50 would receive two HGX 285 calls with a premium of
$6.25.
---------------------------------------------------------------------------
\7\ HGX was listed for trading pursuant to Section 19b-4(e) on
July 17, 2002. The initial index value of HGX was established on or
about January 2, 2002, at $250 by dividing the total market value of
all HGX components by a divisor to reach the $250 valuation. The HGX
index value has increased substantially with the increase in the
total market value of the HGX components, leading to the proposed
market value split that will be achieved by increasing the divisor.
---------------------------------------------------------------------------
In addition, the position limits applicable to HGX, which are
currently 31,500 contracts per Rule 1001A, would be increased to 63,000
until such time that all pre-split options expire, at which point the
position limits would return to the 31,500 position limit specified in
Phlx Rule 1001A. This is being done to accommodate the two-fold
increase in the number of contracts outstanding. By operation of Phlx
Rule 1002A, exercise limits would be equivalent to the position limits
established in Phlx Rule 1001A. The proposed rule change process is
similar to what has been previously employed pursuant to an index value
split.\8\ The trading symbol would remain HGX.
---------------------------------------------------------------------------
\8\ See Securities Exchange Act Release No. 42814 (May 23,
2000), 65 FR 35152 (June 1, 2000) (SR-Phlx-00-11) (two-for-one split
of index value resulted in a doubling of the applicable position and
exercise limits until the last expiration month expired or traded
out, and then reverted to pre-split levels).
---------------------------------------------------------------------------
In conjunction with the proposed split, the Exchange would continue
to list strike price intervals surrounding the new lower Index value
pursuant to Phlx Rule 1101A, which will not change pursuant to this
proposal. The Exchange would announce the effective date of the split
by way of an Exchange memorandum to the membership, which would also
serve as notice of the strike price and position limit changes.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\9\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\10\ in particular, in that it
is designed to promote just and equitable principles of trade and to
remove impediments to and perfect the mechanism of a free and open
market and a national market system, and, in general, to protect
investors and the public interest, by establishing a lower Index value,
which should, in turn, facilitate trading in HGX, creating a more
liquid trading environment. The Exchange believes that reducing the
value of the Index should not raise manipulation concerns and should
not cause adverse market impact because the Exchange will continue to
employ its surveillance procedures and has proposed an orderly
procedure to achieve the Index split, including adequate prior notice
to market participants.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any inappropriate burden on competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received from Members, Participants or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Phlx has filed the proposed rule change pursuant to Section
19(b)(3)(A) of the Act \11\ and subparagraph (f)(6) of Rule 19b-4
thereunder.\12\ Because the foregoing proposed rule change: (1) Does
not significantly affect the protection of investors or the public
interest; (2) does not impose any significant burden on competition;
and (3) does not become operative for 30 days from the date of filing,
or such shorter time as the Commission may designate if consistent with
the protection of investors and the public interest, the proposed rule
change has become effective pursuant to Section 19(b)(3)(A) of the Act
and Rule 19b-4(f)(6) thereunder. As required under Rule 19b-
4(f)(6)(iii), the Phlx provided the Commission with written notice of
its intent to file the proposed rule change at least five business days
prior to filing the proposal with the Commission or such shorter period
as designated by the Commission.
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\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative prior to 30 days after the date of filing.
However, Rule 19b-4(f)(6)(iii) permits the Commission to designate a
shorter time if such action is consistent with the protection of
investors and the public interest. The
[[Page 57921]]
Exchange has requested that the Commission waive the 30-day operative
delay specified in Rule 19b-4(f)(6), so that all options traded on the
indexes can be treated uniformly.\13\
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\13\ The Exchange plans to issue a memorandum to membership
announcing an effective date of the split that is prior to
expiration of the 30-day operative period. Telephone conversation
between Jurij Trypupenko, Director, Phlx, and Florence Harmon,
Senior Special Counsel, Commission, on September 26, 2005.
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The Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public
interest.\14\ Specifically, the Commission believes that the Phlx's
proposal raises no new issues or regulatory concerns that the
Commission did not consider in approving a similar proposal of a two-
for-one split.\15\ Additionally, the Commission notes that the Exchange
will continue to employ its surveillance procedures and has proposed an
orderly procedure to achieve the Index split, including adequate prior
notice to market participants. For these reasons, the Commission
designates that the proposal become operative immediately.
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\14\ For purposes only of waiving the operative delay for this
proposal, the Commission has considered the proposed rule's impact
on efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
\15\ See supra, note 8.
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At any time within 60 days of the filing of such proposed rule
change, the Commission may summarily abrogate such rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
Send an E-mail to rule-comments@sec.gov. Please include
File Number SR-Phlx-2005-50 on the subject line.
Paper comments
Send paper comments in triplicate to Jonathan G. Katz,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-9303.
All submissions should refer to File Number SR-Phlx-2005-50. This
file number should be included on the subject line if e-mail is used.
To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the submission, all subsequent amendments,
all written statements with respect to the proposed rule change that
are filed with the Commission, and all written communications relating
to the proposed rule change between the Commission and any person,
other than those that may be withheld from the public in accordance
with the provisions of 5 U.S.C. 552, will be available for inspection
and copying in the Commission's Public Reference Section, 100 F Street,
NE., Washington, DC 20549. Copies of this filing also will be available
for inspection and copying at the principal office of the Phlx. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-Phlx-2005-50 and should be
submitted on or before October 25, 2005.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Jonathan G. Katz,
Secretary.
[FR Doc. 05-19806 Filed 10-3-05; 8:45 am]
BILLING CODE 8010-01-P
