Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Extension of a Pilot Program Concerning Option Position Limits, 52842-52843 [E6-14793]

Download as PDF 52842 Federal Register / Vol. 71, No. 173 / Thursday, September 7, 2006 / Notices SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54387; File No. SR–Phlx– 2006–48] Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Extension of a Pilot Program Concerning Option Position Limits August 30, 2006. 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 August 16, 2006, the Philadelphia Stock Exchange, Inc. (‘‘Phlx’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the Phlx. The Exchange has filed the proposal as a ‘‘non-controversial’’ rule change pursuant to Section 19(b)(3)(A) of the Act 3 and Rule 19b–4(f)(6) thereunder,4 which renders it effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Phlx proposes to extend, for a period of six months, through March 1, 2007, a pilot program applicable to Exchange Rule 1001, Position Limits, which increases the standard position and exercise limits for equity option contracts and options on the Nasdaq100 Index Tracking Stock 5 (‘‘QQQQ’’) (‘‘Pilot Program’’). The text of the proposed rule change is available on the Phlx’s Web site (http://www.phlx.com), at the Phlx’s principal office, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Phlx included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change Position limits impose a ceiling on the number of option contracts in each class on the same side of the market relating to the same underlying security that can be held or written by an investor or group of investors acting in concert. Exchange Rule 1002 (not proposed to be amended herein) establishes corresponding exercise limits. Exercise limits prohibit an investor or group of investors acting in concert from exercising more than a specified number of puts or calls in a particular class within five consecutive business days. Exchange Rule 1001 subjects equity options to one of five different position limits depending on the trading volume and outstanding shares of the underlying security. Exchange Rule 1002 establishes exercise limits for the corresponding options at the same levels as the corresponding security’s position limits.7 Standard Position and Exercise Limit The Pilot Program increases the standard position and exercise limits for equity options traded on the Exchange and for options overlying QQQQ to the following levels: 1. Purpose The purpose of the proposed rule change is to extend the Pilot Program, which is scheduled to expire September 1, 2006,6 for an additional six-month period, through March 1, 2007. Standard equity option contract limit Pilot program equity option contract limit 8 13,500 22,500 31,500 60,000 75,000 25,000 50,000 75,000 200,000 250,000 Standard QQQQ option contract limit Pilot Program QQQQ option contract limit 300,000 900,000 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b–4(f)(6). 5 The Nasdaq-100, Nasdaq-100 Index, Nasdaq, The Nasdaq Stock Market, Nasdaq-100 SharesSM, Nasdaq-100 TrustSM, Nasdaq-100 Index Tracking StockSM, and QQQSM are trademarks or service marks of The NASDAQ Stock Market LLC (‘‘Nasdaq’’) and have been licensed for use for certain purposes by the Phlx pursuant to a License Agreement (‘‘License’’) with Nasdaq. The Nasdaq100 Index (‘‘Index’’) is determined, composed, and calculated by Nasdaq without regard to the Licensee, the Nasdaq-100 TrustSM, or the beneficial owners of Nasdaq-100 SharesSM. Nasdaq has complete control and sole discretion in determining, comprising, or calculating the Index or rwilkins on PROD1PC63 with NOTICES 2 17 VerDate Aug<31>2005 18:11 Sep 06, 2006 Jkt 208001 in modifying in any way its method for determining, comprising, or calculating the Index in the future. 6 See Securities Exchange Act Release Nos. 51322 (March 4, 2005), 70 FR 12260 (March 11, 2005) (notice of filing and immediate effectiveness of File No. SR–Phlx–2005–17); 52261 (August 15, 2005), 70 FR 49004 (August 22, 2005) (notice of filing and immediate effectiveness of File No. SR–Phlx–2005– 51, which extended the Pilot Program); and 53388 (February 28, 2006), 71 FR 11458 (March 7, 2006) (notice of filing and immediate effectiveness of File No. SR–Phlx–2006–13, which extended the Pilot Program). 7 Exchange Rule 1002 states, in relevant part, ‘‘* * * no member or member organization shall exercise, for any account in which such member or member organization has an interest or for the PO 00000 Frm 00084 Fmt 4703 Sfmt 4703 account of any partner, officer, director or employee thereof or for the account of any customer, a long position in any option contract of a class of options dealt in on the Exchange (or, respecting an option not dealt in on the Exchange, another exchange if the member or member organization is not a member of that exchange) if as a result thereof such member or member organization, or partner, officer, director or employee thereof or customer, acting alone or in concert with others, directly or indirectly, has or will have exercised within any five (5) consecutive business days aggregate long positions in that class (put or call) as set forth as the position limit in Rule 1001, in the case of options on a stock or on an Exchange-Traded Fund Share * * *’’ 8 Except when the Pilot Program is in effect. E:\FR\FM\07SEN1.SGM 07SEN1 Federal Register / Vol. 71, No. 173 / Thursday, September 7, 2006 / Notices To date, the Exchange believes that there have been no adverse affects on the market as a result of these increases in the limits for equity option contracts and options overlying QQQQ. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act 9 in general, and furthers the objective of Section 6(b)(5) of the Act 10 in particular, in that it is designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanisms of a free and open market and the national market system, and, in general to protect investors and the public interest, by extending the Pilot Program for approximately an additional six months. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition 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 either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action rwilkins on PROD1PC63 with NOTICES Because the foregoing rule change does not: (1) Significantly affect the protection of investors or the public interest; (2) impose any significant burden on competition; and (3) become operative for 30 days from the date of this filing, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act 11 and Rule 19b– 4(f)(6) thereunder.12 A proposed rule change filed under 19b–4(f)(6) normally may not become operative prior to 30 days after the date of filing.13 However, Rule 19b– 4(f)(6)(iii) 14 permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange provided the Commission with written notice of its intent to file this proposed rule change at least five business days prior to the date of filing 9 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). 11 15 U.S.C. 78s(b)(3)(A). 12 17 CFR 240.19b–4(f)(6). 13 17 CFR 240.19b–4(f)(6)(iii). 14 Id. 10 15 VerDate Aug<31>2005 19:26 Sep 06, 2006 the proposed rule change. In addition, the Exchange has requested that the Commission waive the 30-day preoperative delay. The Commission believes that waiving the 30-day preoperative delay is consistent with the protection of investors and in the public interest because it will allow the Pilot Program to continue uninterrupted.15 At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the Act. available for inspection and copying in the Commission’s Public Reference Room. Copies of such filing will also 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 No. SR–Phlx–2006–48 and should be submitted on or before September 28, 2006. 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: For the Commission, by the Division of Market Regulation, pursuant to delegated authority.16 Jill M. Peterson, Assistant Secretary. [FR Doc. E6–14793 Filed 9–6–06; 8:45 am] BILLING CODE 8010–01–P SMALL BUSINESS ADMINISTRATION Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File No. SR–Phlx–2006–48 on the subject line. [Disaster Declaration # 10597 and # 10598] Paper Comments SUMMARY: This is a Notice of the Presidential declaration of a major disaster for the State of New Mexico (FEMA–1659–DR), dated 08/30/2006. Incident: Severe Storms and Flooding. Incident Period: 07/26/2006 and continuing. Effective Date: 08/30/2006. Physical Loan Application Deadline Date: 10/30/2006. Economic Injury (Eidl) Loan Application Deadline Date: 05/30/2007. ADDRESSES: Submit completed loan applications to: U.S. Small Business Administration, National Processing And Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155. FOR FURTHER INFORMATION CONTACT: A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street, SW., Suite 6050, Washington, DC 20416. SUPPLEMENTARY INFORMATION: Notice is hereby given that as a result of the President’s major disaster declaration on 08/30/2006, applications for disaster loans may be filed at the address listed above or other locally announced locations. • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File No. SR–Phlx–2006–48. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (http://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be 15 For purposes only of waiving the pre-operative delay, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). Jkt 208001 52843 PO 00000 Frm 00085 Fmt 4703 Sfmt 4703 New Mexico Disaster # NM–00004 U.S. Small Business Administration. ACTION: Notice. AGENCY: 16 17 E:\FR\FM\07SEN1.SGM CFR 200.30–3(a)(12). 07SEN1

Agencies

[Federal Register Volume 71, Number 173 (Thursday, September 7, 2006)]
[Notices]
[Pages 52842-52843]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-14793]



[[Page 52842]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54387; File No. SR-Phlx-2006-48]


Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Relating to the Extension of a Pilot Program Concerning Option Position 
Limits

August 30, 2006.
    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 August 16, 2006, the Philadelphia Stock Exchange, Inc. (``Phlx'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by the Phlx. The Exchange has 
filed the proposal as a ``non-controversial'' rule change pursuant to 
Section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(6) thereunder,\4\ 
which renders it 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).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Phlx proposes to extend, for a period of six months, through 
March 1, 2007, a pilot program applicable to Exchange Rule 1001, 
Position Limits, which increases the standard position and exercise 
limits for equity option contracts and options on the Nasdaq-100 Index 
Tracking Stock \5\ (``QQQQ'') (``Pilot Program''). The text of the 
proposed rule change is available on the Phlx's Web site (http://
www.phlx.com), at the Phlx's principal office, and at the Commission's 
Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Phlx included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
Sections A, B, and C below, of the most significant aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of the proposed rule change is to extend the Pilot 
Program, which is scheduled to expire September 1, 2006,\6\ for an 
additional six-month period, through March 1, 2007.
---------------------------------------------------------------------------

    \5\ The Nasdaq-100[supreg], Nasdaq-100 Index[supreg], 
Nasdaq[supreg], The Nasdaq Stock Market[supreg], Nasdaq-100 
SharesSM, Nasdaq-100 TrustSM, Nasdaq-100 Index 
Tracking StockSM, and QQQSM are trademarks or 
service marks of The NASDAQ Stock Market LLC (``Nasdaq'') and have 
been licensed for use for certain purposes by the Phlx pursuant to a 
License Agreement (``License'') with Nasdaq. The Nasdaq-100 
Index[supreg] (``Index'') is determined, composed, and calculated by 
Nasdaq without regard to the Licensee, the Nasdaq-100 
TrustSM, or the beneficial owners of Nasdaq-100 
SharesSM. Nasdaq has complete control and sole discretion 
in determining, comprising, or calculating the Index or in modifying 
in any way its method for determining, comprising, or calculating 
the Index in the future.
    \6\ See Securities Exchange Act Release Nos. 51322 (March 4, 
2005), 70 FR 12260 (March 11, 2005) (notice of filing and immediate 
effectiveness of File No. SR-Phlx-2005-17); 52261 (August 15, 2005), 
70 FR 49004 (August 22, 2005) (notice of filing and immediate 
effectiveness of File No. SR-Phlx-2005-51, which extended the Pilot 
Program); and 53388 (February 28, 2006), 71 FR 11458 (March 7, 2006) 
(notice of filing and immediate effectiveness of File No. SR-Phlx-
2006-13, which extended the Pilot Program).
---------------------------------------------------------------------------

    Position limits impose a ceiling on the number of option contracts 
in each class on the same side of the market relating to the same 
underlying security that can be held or written by an investor or group 
of investors acting in concert. Exchange Rule 1002 (not proposed to be 
amended herein) establishes corresponding exercise limits. Exercise 
limits prohibit an investor or group of investors acting in concert 
from exercising more than a specified number of puts or calls in a 
particular class within five consecutive business days.
    Exchange Rule 1001 subjects equity options to one of five different 
position limits depending on the trading volume and outstanding shares 
of the underlying security. Exchange Rule 1002 establishes exercise 
limits for the corresponding options at the same levels as the 
corresponding security's position limits.\7\
---------------------------------------------------------------------------

    \7\ Exchange Rule 1002 states, in relevant part, ``* * * no 
member or member organization shall exercise, for any account in 
which such member or member organization has an interest or for the 
account of any partner, officer, director or employee thereof or for 
the account of any customer, a long position in any option contract 
of a class of options dealt in on the Exchange (or, respecting an 
option not dealt in on the Exchange, another exchange if the member 
or member organization is not a member of that exchange) if as a 
result thereof such member or member organization, or partner, 
officer, director or employee thereof or customer, acting alone or 
in concert with others, directly or indirectly, has or will have 
exercised within any five (5) consecutive business days aggregate 
long positions in that class (put or call) as set forth as the 
position limit in Rule 1001, in the case of options on a stock or on 
an Exchange-Traded Fund Share * * *''
    \8\ Except when the Pilot Program is in effect.
---------------------------------------------------------------------------

Standard Position and Exercise Limit
    The Pilot Program increases the standard position and exercise 
limits for equity options traded on the Exchange and for options 
overlying QQQQ to the following levels:

------------------------------------------------------------------------
  Standard equity option contract        Pilot program equity option
              limit 8                           contract limit
------------------------------------------------------------------------
                         13,500                               25,000
                         22,500                               50,000
                         31,500                               75,000
                         60,000                              200,000
                         75,000                              250,000
------------------------------------------------------------------------
Standard QQQQ option contract limit  Pilot Program QQQQ option contract
                                                               limit
------------------------------------------------------------------------
                        300,000                              900,000
------------------------------------------------------------------------


[[Page 52843]]

    To date, the Exchange believes that there have been no adverse 
affects on the market as a result of these increases in the limits for 
equity option contracts and options overlying QQQQ.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \9\ in general, and furthers the objective of Section 
6(b)(5) of the Act \10\ in particular, in that it is designed to 
promote just and equitable principles of trade, to remove impediments 
to and perfect the mechanisms of a free and open market and the 
national market system, and, in general to protect investors and the 
public interest, by extending the Pilot Program for approximately an 
additional six months.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition 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 either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing rule change does not: (1) Significantly 
affect the protection of investors or the public interest; (2) impose 
any significant burden on competition; and (3) become operative for 30 
days from the date of this filing, or such shorter time as the 
Commission may designate, it has become effective pursuant to Section 
19(b)(3)(A) of the Act \11\ and Rule 19b-4(f)(6) thereunder.\12\
    A proposed rule change filed under 19b-4(f)(6) normally may not 
become operative prior to 30 days after the date of filing.\13\ 
However, Rule 19b-4(f)(6)(iii) \14\ permits the Commission to designate 
a shorter time if such action is consistent with the protection of 
investors and the public interest. The Exchange provided the Commission 
with written notice of its intent to file this proposed rule change at 
least five business days prior to the date of filing the proposed rule 
change. In addition, the Exchange has requested that the Commission 
waive the 30-day pre-operative delay. The Commission believes that 
waiving the 30-day pre-operative delay is consistent with the 
protection of investors and in the public interest because it will 
allow the Pilot Program to continue uninterrupted.\15\
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(6).
    \13\ 17 CFR 240.19b-4(f)(6)(iii).
    \14\ Id.
    \15\ For purposes only of waiving the pre-operative delay, the 
Commission has considered the proposed rule's impact on efficiency, 
competition, and capital formation. 15 U.S.C. 78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule 
change, the Commission may summarily abrogate such rule change if it 
appears to the Commission that such action is necessary or appropriate 
in the public interest, for the protection of investors, or otherwise 
in furtherance of the Act.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File No. SR-Phlx-2006-48 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-1090.

All submissions should refer to File No. SR-Phlx-2006-48. This file 
number should be included on the subject line if e-mail is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/
sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for inspection and 
copying in the Commission's Public Reference Room. Copies of such 
filing will also 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 No. SR-Phlx-2006-48 and should be submitted on or before September 
28, 2006.
    For the Commission, by the Division of Market Regulation, pursuant 
to delegated authority.\16\
---------------------------------------------------------------------------

    \16\ 17 CFR 200.30-3(a)(12).

Jill M. Peterson,
Assistant Secretary.
 [FR Doc. E6-14793 Filed 9-6-06; 8:45 am]
BILLING CODE 8010-01-P