Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Listing LEAPS Pursuant to the $2.50 Strike Price Program, 9371-9373 [E7-3563]
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Federal Register / Vol. 72, No. 40 / Thursday, March 1, 2007 / Notices
their responsibility to obtain price
improvement for orders.
In its response letter, NYSE noted that
specialists are not currently obligated to
stop stock and further noted that, in
fact, specialists infrequently choose to
stop stock. NYSE reiterated its belief
that there are many opportunities for
price improvement in the Hybrid
Market and stated that specialists were
not ‘‘being relieved of their
responsibility to obtain price
improvement.’’ The Exchange argued
that it was eliminating a practice that its
data showed was rarely used. The
Exchange also argued that retaining the
manual process for the specialist to stop
stock would increase specialist risk if
used.
The commenter also asserted that
NYSE could easily reprogram its
systems to replicate electronically the
manual practice of stopping stock. In
response, NYSE disagreed, indicating
that there are difficulties inherent in
maintaining the stopping stock
functionality amid systems designed to
enable increased automatic executions.
Further, NYSE argued that the decision
to remove systemic support for stopped
orders was based in part on data that
showed that specialists do not stop
stock frequently.
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IV. Discussion
The Commission finds that the
proposed rule change is consistent with
the requirements of the Act and the
rules and regulations thereunder
applicable to a national securities
exchange 8 and, in particular, the
requirements of Section 6 of the Act.9
Specifically, the Commission finds that
the proposed rule change is consistent
with Section 6(b)(5) of the Act,10 which
requires, among other things, that the
rules of a national securities exchange
be designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to foster cooperation and
coordination with persons engaged in
regulating, clearing, settling, processing
information with respect to, and
facilitating transactions in securities, to
remove impediments to and perfect the
mechanism of a free and open market
and a national market system, and, in
general, to protect investors and the
public interest.
According to the Exchange, the
practice of stopping stock by specialists
is rarely used. Therefore, the Exchange
8 In
approving this proposed rule change, the
Commission has considered the proposed rule’s
impact on efficiency, competition, and capital
formation. 15 U.S.C. 78c(f).
9 15 U.S.C. 78f.
10 15 U.S.C. 78f(b)(5).
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decided that it would not develop an
electronic, systemic process to support
this little used, voluntary function. The
Exchange also argued that retaining a
manual process to stop stock in the
Hybrid Market would be inefficient.
Accordingly, the Commission finds that
eliminating specialists’ ability to stop
stock is reasonable and consistent with
the Act.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,11 that the
proposed rule change (SR–NYSE–2006–
04), as modified by Amendment Nos. 1
and 2, be, and it hereby is approved.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.12
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–3556 Filed 2–28–07; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–55338; File No. SR–Phlx–
2007–04]
Self-Regulatory Organizations;
Philadelphia Stock Exchange, Inc.;
Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change Relating to Listing LEAPS
Pursuant to the $2.50 Strike Price
Program
February 23, 2007.
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 February
21, 2007, 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 substantially prepared by 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.
11 15
U.S.C. 78s(b)(2).
CFR 200.30–3(a)(12).
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).
12 17
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9371
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Phlx proposes to clarify that LEAPS 5
can be listed at $2.50 strike price
intervals pursuant to the $2.50 Strike
Price Program set forth in Commentary
.05 to Phlx Rule 1012 (Series of Options
Open for Trading). There is no new rule
text.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
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 proposal is to
clarify that LEAPS can be listed at $2.50
strike price intervals pursuant to the
$2.50 Strike Price Program.
The current $2.50 Strike Price
Program is set forth in Commentary .05
to Phlx Rule 1012. The $2.50 Strike
Price Program permits the Exchange to
list options with $2.50 strike price
intervals for selected options trading at
strike prices greater than $25 but less
than $75. In addition, each options
exchange is permitted to list options
with $2.50 strike price intervals on any
option class that another options
exchange selects under the $2.50 Strike
Price Program.
Initially adopted in 1995 as a pilot
program, the pilot $2.50 Strike Price
Program allowed options exchanges to
list options with $2.50 strike price
intervals for options trading at strike
prices greater than $25 but less than $50
on a total of up to 100 option classes.6
In 1998, the pilot program was
permanently approved and expanded to
allow the options exchanges to select up
to 200 option classes for the $2.50 Strike
5 LEAPS are Long-term Equity Anticipation
Securities or long-term options series. See Phlx
Rules 1079, 1012, and 1101A.
6 See Securities Exchange Act Release No. 35993
(July 19, 1995), 60 FR 38073 (July 25, 1995) (SR–
Phlx–95–08, SR–Amex–95–12, SR–PSE–95–07, SR–
CBOE–95–19, and SR–NYSE–95–12).
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9372
Federal Register / Vol. 72, No. 40 / Thursday, March 1, 2007 / Notices
rmajette on PROD1PC67 with NOTICES
Price Program.7 Of the 200 options
classes eligible for the $2.50 Strike Price
Program, 46 have been allocated to
Phlx.8 In 2005, the $2.50 Strike Price
Program was expanded to permit the
listing of options with $2.50 strike price
intervals for options with strike prices
between $50 and $75, provided that the
$2.50 strike price intervals are no more
than $10 from the closing price of the
underlying stock in its primary market 9
on the preceding day.10 With the
expansion of the $2.50 Strike Price
Program to options with strike prices
below $75, for example, if an option
class has been selected as part of the
$2.50 Strike Price Program, and the
underlying stock closed at $48.50 in its
primary market, the Exchange may list
options with strike prices of $52.50 and
$57.50 on the next business day; and if
an underlying security closed at $54, the
Exchange may list options with strike
prices of $52.50, $57.50, and $62.50 on
the next business day. Moreover, an
option class would remain in the $2.50
Strike Price Program until the Exchange
otherwise designates and sends a
decertification notice to the Options
Clearing Corporation.
The Exchange is hereby clarifying that
it, like other options exchanges with the
$2.50 Strike Price Program, may list
LEAPS at $2.50 strike price intervals at
all strike prices that are available
pursuant to the $2.50 Strike Price
Program. The Exchange believes that the
$2.50 Strike Price Program has benefited
the marketplace by creating additional
trading opportunities for customers in
all options including LEAPS by
affording such customers the ability to
more closely tailor investment strategies
to the precise movement of the
underlying security. The availability of
$2.50 strike price intervals for LEAPS
will likewise benefit the marketplace
and is in conformity with current
industry practice.
7 See Securities Exchange Act Release No. 40662
(November 12, 1998), 63 FR 64297 (November 19,
1998) (SR–Amex–98–21, SR–CBOE–98–29, SR–
PCX–98–31, and SR–Phlx–98–26).
8 The allocation is not changed by this proposed
rule filing.
9 The term ‘‘primary market’’ is defined in Phlx
Rule 1000 in respect of an underlying stock or
Exchange-Traded Fund Share as the principal
market in which the underlying stock or ExchangeTraded Fund Share is traded.
10 See Securities Exchange Act Release No. 52961
(December 15, 2005), 70 FR 76095 (December 22,
2005) (SR–Phlx–2005–77). See also Securities
Exchange Act Release Nos. 52893 (December 5,
2005), 70 FR 73488 (December 12, 2005) (SR–
Amex–2005–067); 52892 (December 5, 2005), 70 FR
73492 (December 12, 2005) (SR–CBOE–2005–39);
52960 (December 15, 2005), 70 FR 76090 (December
22, 2005) (SR–ISE–2005–59); and 52986 (December
20, 2005), 70 FR 76897 (December 28, 2005) (SR–
PCX–2005–137).
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15:01 Feb 28, 2007
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2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act 11 in general, and furthers the
objective of Section 6(b)(5) of the Act 12
in particular, in that it is designed to
prevent fraudulent and manipulative
acts and practices, to promote just and
equitable principles of trade, to foster
cooperation and coordination with
persons engaged in facilitating
transactions in securities, and to remove
impediments to and perfect the
mechanism of a free and open market
and the national market system.
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 13 and Rule 19b–
4(f)(6) thereunder.14
A proposed rule change filed under
19b–4(f)(6) normally may not become
operative prior to 30 days after the date
of filing.15 However, Rule 19b–
4(f)(6)(iii) 16 permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest. The
Exchange has requested that the
Commission waive the 30-day operative
11 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
13 15 U.S.C. 78s(b)(3)(A).
14 17 CFR 240.19b–4(f)(6).
15 17 CFR 240.19b–4(f)(6)(iii). In addition, Rule
19b–4(f)(6)(iii) requires that a self-regulatory
organization submit to the Commission written
notice of its intent to file the proposed rule change,
along with a brief description and text of the
proposed rule change, at least five business days
prior to the date of filing of the proposed rule
change, or such shorter time as designated by the
Commission. Phlx has satisfied the five-day prefiling requirement.
16 Id.
12 15
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Frm 00071
Fmt 4703
Sfmt 4703
delay. The Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and in the public interest so
that it is clear that the Exchange has the
immediate ability to list and trade
LEAPS at $2.50 strike price intervals at
all strike prices that are available
pursuant to the $2.50 Strike Price
Program. For this reason, the
Commission designates the proposed
rule change to be operative upon filing
with the Commission.17
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 (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
No. SR–Phlx–2007–04 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–2007–04. 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
17 For purposes only of waiving the operative
delay, the Commission has considered the proposed
rule’s impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
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Federal Register / Vol. 72, No. 40 / Thursday, March 1, 2007 / Notices
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 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–2007–04 and should be
submitted on or before March 22, 2007.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.18
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–3563 Filed 2–28–07; 8:45 am]
BILLING CODE 8010–01–P
SOCIAL SECURITY ADMINISTRATION
[Docket No. SSA 2007–0013]
Privacy Act of 1974 as Amended;
Computer Matching Program (SSA/
Department of Veterans Affairs (VA),
Veterans Benefit Administration
(VBA))—Match Number 1008
AGENCY:
Social Security Administration
(SSA).
Notice of a renewal of a
computer matching program.
rmajette on PROD1PC67 with NOTICES
ACTION:
SUMMARY: In accordance with the
provisions of the Privacy Act, as
amended, this notice announces a
renewal of a computer matching
program that SSA will conduct with
VA/VBA.
DATES: SSA will file a report of the
subject matching program with the
Committee on Homeland Security and
Governmental Affairs of the Senate, the
Committee on Government Reform of
the House of Representatives, and the
Office of Information and Regulatory
Affairs, Office of Management and
Budget (OMB). The matching program
will be effective as indicated below.
ADDRESSES: Interested parties may
comment on this notice by either
telefaxing to (410) 965–8582 or writing
to the Associate Commissioner, Office of
Income Security Programs, 252
Altmeyer Building, 6401 Security
Boulevard, Baltimore, MD 21235–6401.
All comments received will be available
for public inspection at this address.
18 17
CFR 200.30–3(a)(12).
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15:01 Feb 28, 2007
Jkt 211001
FOR FURTHER INFORMATION CONTACT:
The
Associate Commissioner for Income
Security Programs as shown above.
SUPPLEMENTARY INFORMATION:
A. General
The Computer Matching and Privacy
Protection Act of 1988 (Pub. L. 100–
503), amended the Privacy Act (5 U.S.C.
552a) by describing the manner in
which computer matching involving
Federal agencies could be performed
and adding certain protections for
individuals applying for, and receiving,
Federal benefits. Section 7201 of the
Omnibus Budget Reconciliation Act of
1990 (Pub. L. 101–508) further amended
the Privacy Act regarding protections for
such individuals. The Privacy Act, as
amended, regulates the use of computer
matching by Federal agencies when
records in a system of records are
matched with other Federal, State, or
local government records.
It requires Federal agencies involved
in computer matching programs to:
(1) Negotiate written agreements with
the other agency or agencies
participating in the matching programs;
(2) Obtain the Data Integrity Boards’
approval of the match agreements;
(3) Publish notice of the computer
matching program in the Federal
Register;
(4) Furnish detailed reports about
matching programs to Congress and
OMB;
(5) Notify applicants and beneficiaries
that their records are subject to
matching; and
(6) Verify match findings before
reducing, suspending, terminating, or
denying an individual’s benefits or
payments.
B. SSA Computer Matches Subject to
the Privacy Act
We have taken action to ensure that
all of SSA’s computer matching
programs comply with the requirements
of the Privacy Act, as amended.
Dated: February 22, 2007.
Martin H. Gerry,
Deputy Commissioner for Disability and
Income Security Programs.
Notice of Computer Matching Program,
Social Security Administration (SSA)
With Department of Veterans Affairs
(VA), Veterans Benefit Administration
(VBA) Match Number 1008
A. Participating Agencies
SSA and VA/VBA.
B. Purpose of the Matching Program
The purpose of this matching program
is to establish the conditions for VA/
VBA as the source agency to disclose
PO 00000
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Fmt 4703
Sfmt 4703
9373
VA compensation and pension payment
data to SSA, the recipient agency. This
disclosure will provide SSA with
information necessary to identify certain
Supplemental Security Income (SSI)
and Special Veterans Benefit (SVB)
recipients under titles XVI and VIII of
the Social Security Act (the Act)
respectively, who receive VAadministered benefits. SSA will then
update the SSI/SVB records to reflect
the presence of such payments.
The disclosure will also enable SSA
to efficiently implement a Medicare
outreach program mandated by Section
1144 of title XI of the Act. Information
disclosed by VA will enable SSA to
identify income limits for certain
individuals; to determine their potential
eligibility for Medicare Savings
Programs, and to identify these
individuals to the States.
C. Authority for Conducting the
Matching Program
The legal authority for SSA to
conduct this matching activity is
contained in sections 1631(e)(1)(B) and
1631(f) of the Act, (42 U.S.C.
1383(e)(1)(B) and 1383(f)(SSI)), and
section 806(b) of the Act, (42 U.S.C.
1006(b)(SVB)) and section 1144 of the
Act, (42 U.S.C. 1320b–14). SSA is
required to verify declarations of
applicants for, and recipients of, SSI
payments before making a
determination of eligibility or payment
amount.
The legal authority for VA to disclose
information for this match is contained
in section 1631(f) of the Act, (42 U.S.C.
Section 1383(f)). That section requires
Federal agencies to provide such
information as the Commissioner of
Social Security needs for purposes of
determining eligibility for or amount of
benefits, or verifying other information
with respect thereto.
D. Categories of Records and
Individuals Covered by the Matching
Program
VA will provide SSA with electronic
files containing compensation and
pension payment data from its system of
records entitled the Compensation,
Pension, Education and Rehabilitation
Records—VA (58VA21/22) first
published at 41 FR 9294 (March 3,
1976), and last amended at 70 FR 34186
(June 13, 2005), with other amendments
as cited therein. SSA will then match
VA data with SSI/SVB payment
information maintained in its system of
records entitled Supplemental Security
Income Record and Special Veterans
Benefits (SSA/OEEAS 60–0103.)
Routine use 21 of 58VA21/22 and
routine use 3 of 60–0103 permits
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]]>Agencies
[Federal Register Volume 72, Number 40 (Thursday, March 1, 2007)]
[Notices]
[Pages 9371-9373]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-3563]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-55338; File No. SR-Phlx-2007-04]
Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Relating to Listing LEAPS Pursuant to the $2.50 Strike Price Program
February 23, 2007.
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 February 21, 2007, 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 substantially prepared by 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).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Phlx proposes to clarify that LEAPS \5\ can be listed at $2.50
strike price intervals pursuant to the $2.50 Strike Price Program set
forth in Commentary .05 to Phlx Rule 1012 (Series of Options Open for
Trading). There is no new rule text.
---------------------------------------------------------------------------
\5\ LEAPS are Long-term Equity Anticipation Securities or long-
term options series. See Phlx Rules 1079, 1012, and 1101A.
---------------------------------------------------------------------------
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, 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 proposal is to clarify that LEAPS can be listed
at $2.50 strike price intervals pursuant to the $2.50 Strike Price
Program.
The current $2.50 Strike Price Program is set forth in Commentary
.05 to Phlx Rule 1012. The $2.50 Strike Price Program permits the
Exchange to list options with $2.50 strike price intervals for selected
options trading at strike prices greater than $25 but less than $75. In
addition, each options exchange is permitted to list options with $2.50
strike price intervals on any option class that another options
exchange selects under the $2.50 Strike Price Program.
Initially adopted in 1995 as a pilot program, the pilot $2.50
Strike Price Program allowed options exchanges to list options with
$2.50 strike price intervals for options trading at strike prices
greater than $25 but less than $50 on a total of up to 100 option
classes.\6\ In 1998, the pilot program was permanently approved and
expanded to allow the options exchanges to select up to 200 option
classes for the $2.50 Strike
[[Page 9372]]
Price Program.\7\ Of the 200 options classes eligible for the $2.50
Strike Price Program, 46 have been allocated to Phlx.\8\ In 2005, the
$2.50 Strike Price Program was expanded to permit the listing of
options with $2.50 strike price intervals for options with strike
prices between $50 and $75, provided that the $2.50 strike price
intervals are no more than $10 from the closing price of the underlying
stock in its primary market \9\ on the preceding day.\10\ With the
expansion of the $2.50 Strike Price Program to options with strike
prices below $75, for example, if an option class has been selected as
part of the $2.50 Strike Price Program, and the underlying stock closed
at $48.50 in its primary market, the Exchange may list options with
strike prices of $52.50 and $57.50 on the next business day; and if an
underlying security closed at $54, the Exchange may list options with
strike prices of $52.50, $57.50, and $62.50 on the next business day.
Moreover, an option class would remain in the $2.50 Strike Price
Program until the Exchange otherwise designates and sends a
decertification notice to the Options Clearing Corporation.
---------------------------------------------------------------------------
\6\ See Securities Exchange Act Release No. 35993 (July 19,
1995), 60 FR 38073 (July 25, 1995) (SR-Phlx-95-08, SR-Amex-95-12,
SR-PSE-95-07, SR-CBOE-95-19, and SR-NYSE-95-12).
\7\ See Securities Exchange Act Release No. 40662 (November 12,
1998), 63 FR 64297 (November 19, 1998) (SR-Amex-98-21, SR-CBOE-98-
29, SR-PCX-98-31, and SR-Phlx-98-26).
\8\ The allocation is not changed by this proposed rule filing.
\9\ The term ``primary market'' is defined in Phlx Rule 1000 in
respect of an underlying stock or Exchange-Traded Fund Share as the
principal market in which the underlying stock or Exchange-Traded
Fund Share is traded.
\10\ See Securities Exchange Act Release No. 52961 (December 15,
2005), 70 FR 76095 (December 22, 2005) (SR-Phlx-2005-77). See also
Securities Exchange Act Release Nos. 52893 (December 5, 2005), 70 FR
73488 (December 12, 2005) (SR-Amex-2005-067); 52892 (December 5,
2005), 70 FR 73492 (December 12, 2005) (SR-CBOE-2005-39); 52960
(December 15, 2005), 70 FR 76090 (December 22, 2005) (SR-ISE-2005-
59); and 52986 (December 20, 2005), 70 FR 76897 (December 28, 2005)
(SR-PCX-2005-137).
---------------------------------------------------------------------------
The Exchange is hereby clarifying that it, like other options
exchanges with the $2.50 Strike Price Program, may list LEAPS at $2.50
strike price intervals at all strike prices that are available pursuant
to the $2.50 Strike Price Program. The Exchange believes that the $2.50
Strike Price Program has benefited the marketplace by creating
additional trading opportunities for customers in all options including
LEAPS by affording such customers the ability to more closely tailor
investment strategies to the precise movement of the underlying
security. The availability of $2.50 strike price intervals for LEAPS
will likewise benefit the marketplace and is in conformity with current
industry practice.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act \11\ in general, and furthers the objective of Section
6(b)(5) of the Act \12\ in particular, in that it is designed to
prevent fraudulent and manipulative acts and practices, to promote just
and equitable principles of trade, to foster cooperation and
coordination with persons engaged in facilitating transactions in
securities, and to remove impediments to and perfect the mechanism of a
free and open market and the national market system.
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\11\ 15 U.S.C. 78f(b).
\12\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition 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 \13\ and Rule 19b-4(f)(6) thereunder.\14\
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\13\ 15 U.S.C. 78s(b)(3)(A).
\14\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under 19b-4(f)(6) normally may not
become operative prior to 30 days after the date of filing.\15\
However, Rule 19b-4(f)(6)(iii) \16\ permits the Commission to designate
a shorter time if such action is consistent with the protection of
investors and the public interest. The Exchange has requested that the
Commission waive the 30-day operative delay. The Commission believes
that waiving the 30-day operative delay is consistent with the
protection of investors and in the public interest so that it is clear
that the Exchange has the immediate ability to list and trade LEAPS at
$2.50 strike price intervals at all strike prices that are available
pursuant to the $2.50 Strike Price Program. For this reason, the
Commission designates the proposed rule change to be operative upon
filing with the Commission.\17\
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\15\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-
4(f)(6)(iii) requires that a self-regulatory organization submit to
the Commission written notice of its intent to file the proposed
rule change, along with a brief description and text of the proposed
rule change, at least five business days prior to the date of filing
of the proposed rule change, or such shorter time as designated by
the Commission. Phlx has satisfied the five-day pre-filing
requirement.
\16\ Id.
\17\ For purposes only of waiving the operative delay, the
Commission has considered the proposed rule's impact on efficiency,
competition, and capital formation. See 15 U.S.C. 78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate such rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the 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 No. SR-Phlx-2007-04 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-2007-04. 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
[[Page 9373]]
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 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-2007-04 and should be submitted on or before March 22, 2007.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\18\
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\18\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-3563 Filed 2-28-07; 8:45 am]
BILLING CODE 8010-01-P
