Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendment No. 1 Thereto, Relating to U.S. Dollar-Settled Foreign Currency Options, 38853-38858 [E7-13695]
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Federal Register / Vol. 72, No. 135 / Monday, July 16, 2007 / Notices
At any time within 60 days of the
filing of the proposed rule change, the
Commission may summarily abrogate
the 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
No. SR–CBOE–2007–70 on the subject
line.
Paper Comments
hsrobinson on PROD1PC76 with NOTICES
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–CBOE–2007–70. 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 Commissions
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
data vendors (to the extent data from market data
vendors is available); (4) any capacity problems or
other problems that arose during the operation of
the Pilot Program and how the Exchange addressed
such problems; (5) any complaints that the
Exchange received during the operation of the Pilot
Program and how the Exchange addressed them;
and (6) any additional information that would assist
in assessing the operation of the Pilot Program. The
report must be submitted to the Commission at least
sixty (60) days prior to the expiration date of the
Pilot Program. See Pilot Program Release, supra
note 5.
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Room, 100 F Street, NE., Washington,
DC 20549, on official business days
between the hours of 10 a.m. and 3 p.m.
Copies of such filing also will be
available for inspection and copying at
the principal office of the Exchange. All
comments received will be posted
without change; the Commission does
not edit personal identifying
information from submissions. You
should submit only information that
you wish to make available publicly. All
submissions should refer to File
Number SR–CBOE–2007–70 and should
be submitted on or before August 6,
2007.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.13
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–13696 Filed 7–13–07; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–56034; International Series
Release No. 1304; File No. SR–Phlx–2007–
34]
Self-Regulatory Organizations;
Philadelphia Stock Exchange, Inc.;
Notice of Filing and Order Granting
Accelerated Approval of a Proposed
Rule Change, as Modified by
Amendment No. 1 Thereto, Relating to
U.S. Dollar-Settled Foreign Currency
Options
38853
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Phlx proposes to: (1) List and trade
U.S. dollar-settled foreign currency
options (‘‘FCOs’’) on the Australian
dollar, the Canadian dollar, the Swiss
franc and the Japanese yen (together, the
‘‘New Currencies’’); (2) amend certain
rules relating to the quoting convention
for U.S. dollar-settled FCOs for purposes
of clarity; (3) delete from Rule 1012 a
requirement that the Exchange delist
any series of U.S. dollar-settled FCOs
outside of a ten percent band around the
spot price that have no open interest; (4)
amend the closing settlement value rule
by moving from 2 p.m. (Eastern time
(‘‘ET’’)) to 5 p.m. ET the time after
which the Exchange will use the
previously announced Noon Buying
Rate as the basis for the closing
settlement value; (5) extend the
applicability of Rule 1064, ‘‘Crossing,
Facilitation and Solicited Orders,’’ to
U.S. dollar-settled FCOs; and (6) clarify
the applicability of Rule 1092, ‘‘Obvious
Errors,’’ to U.S. dollar-settled FCOs.
The text of the proposed rule change
is available on the Exchange’s Web site
at https://www.Phlx.com/exchange/
phlx_rule_fil.html, at the Exchange, and
at the Commission’s Public Reference
Room.
July 10, 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 April 13,
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. On June 13, 2007,
the Exchange filed Amendment No. 1 to
the proposed rule change.3 The
Commission is publishing this notice to
solicit comments on the proposed rule
change, as amended, from interested
persons and is approving the proposal,
as modified by Amendment No. 1, on an
accelerated basis.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of, and basis for,
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item III 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
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 Amendment No. 1 replaced the original filing in
its entirety.
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1 15
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1. Purpose
On January 8, 2007, the Exchange
began trading U.S. dollar-settled options
on the British pound and the Euro on
the Exchange’s electronic trading
platform for options, Phlx XL.4 These
4 See Securities Exchange Act Release No. 54989
(December 21, 2006), 71 FR 78506 (December 29,
2006) (SR–Phlx–2006–34) (‘‘Pound/Euro FCO
Approval Order’’). In approving the listing and
trading of U.S. dollar-settled FCOs on the British
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Federal Register / Vol. 72, No. 135 / Monday, July 16, 2007 / Notices
hsrobinson on PROD1PC76 with NOTICES
new U.S. dollar-settled FCOs were in
addition to the Exchange’s existing
physical delivery FCOs. The Exchange
now proposes to list U.S. dollar-settled
FCOs on the New Currencies. U.S.
dollar-settled FCOs on the New
Currencies will be subject to the same
rules that now apply to existing U.S.
dollar-settled options on foreign
currencies.5 In addition, a number of
rules are being amended to specifically
apply to U.S. dollar-settled options on
the New Currencies, as described below.
Like the British pound and the Euro,
physical delivery options on the four
New Currencies are already traded on
the Exchange. These existing, physical
delivery options on the New Currencies
will not be affected by this proposal and
will continue to trade as they do today,
by open outcry.
The Exchange proposes to
disseminate, over the facilities of the
Consolidated Tape Association, at least
once every fifteen seconds while the
Exchange is open for trading, a modified
spot rate for the four New Currencies
like the modified spot rate currently
disseminated for the British pound and
the Euro.6 The modified spot rate will
be calculated by the Exchange based on
spot prices (bids and asks) it receives
from Thomson Financial LLC
(‘‘Thomson’’). For the Australian dollar,
the Exchange will determine the
midpoint between the bid and the ask
and will modify that rate by multiplying
it by 100.7 However, because the
Thomson spot rate selected by the
Exchange 8 is expressed differently for
the Canadian dollar, the Japanese yen
and the Swiss franc than for the
Australian dollar, the British pound and
the Euro (in foreign currency units per
U.S. dollar rather than in U.S. dollars
per unit of foreign currency) the
modified spot rate Phlx will disseminate
for the Canadian dollar, the Japanese
yen and the Swiss franc will be one
divided by the midpoint between the
pound and the Euro, the Commission’s approval
order stated that the listing and trading of
additional U.S. dollar-settled FCOs on other foreign
currencies would require the Exchange to file
additional proposed rule changes on Form 19b–4.
Id.
5 See Pound/Euro FCO Approval Order, supra
note 4, for a description of the rules applicable to
U.S. dollar-settled FCOs.
6 See Securities Exchange Act Release No. 55513
(March 22, 2007), 72 FR 14636 (March 28, 2007)
(SR–Phlx–2007–28). The modified spot rate
disseminated by the Exchange will not otherwise
amend or affect the Exchange’s existing rules
governing U.S. dollar-settled FCOs.
7 For example, if .8688 U.S. dollars buys 1
Australian dollar, a modifier of 100 would be used
so that the modified spot rate would become 86.88.
8 Telephone conversation between Carla
Behnfeldt, Director, Phlx, David Hsu, Special
Counsel, and Sara Gillis, Attorney, Division of
Market Regulation, Commission, on June 20, 2007.
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Jkt 211001
bid and ask of the Thomson spot rate,
rounded up to the nearest millionth if
the result ends in values greater than or
equal to five ten-millionths, and
rounded down if less than five tenmillionths, multiplied by the
appropriate modifier.9 For the Canadian
dollar and the Swiss franc, the modifier
will be 100. For the Japanese yen, the
modifier will be 10,000.10 The Exchange
believes that sufficient other venues
exist for obtaining reliable spot market
information on the New Currencies so
that investors in U.S. dollar-settled
FCOs can monitor the underlying spot
market in the New Currencies.
Rule 1012, ‘‘Series Of Options Open
For Trading,’’ Commentary .06,
currently provides that the Exchange
will initially list exercise strike prices
for each expiration of U.S. dollar-settled
options on the Euro and the British
pound within a ten percent band around
the current spot price at half-cent
($.005) intervals. This rule is being
expanded to cover all U.S. dollar-settled
foreign currency options, including
options on the New Currencies. The
Exchange also is proposing to amend
the rule by deleting a current
requirement that the Exchange delist
any previously-listed series outside of
the current ten percent band that have
no open interest. The Exchange has
found that this requirement is an
administrative burden and does not
believe that the restriction is justified.
For example, the Exchange has found
that approximately once a week, it is
required to delete a series only to have
it be listed again in a day or two due to
movement in the currency. Delisting
and relisting various exercise prices
with no advance notice on a daily basis
has the potential to confuse investors
and complicate their trading strategies
and decisions.
Rule 1033, ‘‘Bids and Offers—
Premium,’’ will apply to U.S. dollarsettled options on the New Currencies
as well as to the existing U.S. dollarsettled options on the British pound and
the Euro. Pursuant to Rule
1033(b)(ii)(A), bids and offers are to be
expressed in terms of U.S. dollars per
9 Premiums and spot rates for the Canadian
dollar, the Japanese yen, and the Swiss franc have
been quoted in foreign currency units per U.S.
dollar for years in connection with the Exchange’s
physical delivery FCOs. The Exchange also
represents that other major market data vendors
also quote spot rates in terms of foreign currency
units per U.S. dollar for these currencies as well.
10 For example, if 115.84 Japanese yen buys one
U.S. dollar, the Exchange will divide that amount
into one to determine that .008632596 dollars will
buy one Japanese yen. The Exchange would then
multiply the rounded figure, .008633, by 10,000, so
that the modified spot rate to be disseminated
would be 86.33.
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Fmt 4703
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unit of the underlying foreign currency,
provided that the first two decimal
places shall be omitted from all bid and
offer quotations for the Swiss franc, the
Canadian dollar, and the Australian
dollar, and the first four decimal places
shall be omitted from all bid and offer
quotations for the Japanese yen. Thus,
for example, a bid of ‘‘1.60’’ for an
option contract on the Japanese yen
shall represent a bid to pay $.000160 per
yen.11
Rule 1034, ‘‘Minimum Increments,’’
currently prescribes the minimum
trading increment for all U.S. dollarsettled FCOs. This rule will now apply
to the New Currencies as well. However,
the rule is being amended to add an
example of the minimum trading
increment in the case of U.S. dollarsettled options on the Japanese yen,
which differs from the other U.S. dollarsettled currencies options in that four
decimal places, rather than two, are to
be disregarded.12
Rule 1057, ‘‘U.S. Dollar-Settled
Foreign Currency Option Closing
Settlement Value,’’ currently provides
for the determination of the closing
settlement value for U.S. dollar-settled
options on the British pound and the
Euro. The rule is being amended to
provide for the closing settlement value
for U.S. dollar settled options on the
New Currencies. Because the Noon
Buying Rate is expressed differently for
11 Rule 1014, ‘‘Obligations and Restrictions
Applicable to Specialists and Registered Options
Traders,’’ and Options Floor Procedure Advice F–
6, ‘‘Option Quote Parameters,’’ are being revised to
provide an illustration of the different option quote
spread parameters for U.S. dollar-settled options on
the Japanese yen, which differ from the other U.S.
dollar-settled FCOs in that four decimal places,
rather than two, are to be disregarded when the
quote parameters are expressed.
Rules 1014 and 1034 are also being amended by
removing the dollar sign before the ‘‘expressed as’’
values for quotes and quote spread parameters.
Similarly, dollar signs are being added to Options
Floor Procedure Advice F–6 in front of the
maximum quote spreads (but not in front of the
‘‘expressed as’’ values for the maximum quote
spreads). The Exchange believes that these changes
will make the quoting convention (i.e., disregarding
the first four decimal places for the Japanese yen
and the first two decimal places for the other
currencies underlying the U.S. dollar-settled FCOs)
less confusing to the investing public. The changes
will also make Rules 1014 and 1034 more
consistent with Rule 1033.
12 Thus, the amended rule provides that all U.S.
dollar-settled FCOs on the Japanese yen quoting at
$.000300 (expressed as 3.00) or higher shall have
a minimum trading increment of $.000010 per unit
of the foreign currency, expressed as .10 per unit
of the foreign currency, which equals a $10.00
minimum increment per contract consisting of
1,000,000 Japanese yen. The minimum increment
for U.S. dollar-settled FCOs on the Japanese yen
quoting under $.000300 (expressed as 3.00) shall be
$.000005 per unit of the foreign currency, expressed
as .05 per unit of the foreign currency, which equals
a $5.00 minimum increment per contract consisting
of 1,000,000 Japanese yen.
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Federal Register / Vol. 72, No. 135 / Monday, July 16, 2007 / Notices
the Canadian dollar, the Japanese yen,
and the Swiss franc than for the
Australian dollar, the British pound,
and the Euro—in foreign currency units
per U. S. dollar rather than in U. S.
dollars per unit of foreign currency—the
closing settlement value for the
Canadian dollar, the Japanese yen, and
the Swiss franc will be an amount equal
to one divided by the day’s announced
Noon Buying Rate, as determined by the
Federal Reserve Bank of New York on
the trading day prior to expiration,
rounded to the nearest .0001 (except in
the case of the Japanese yen where the
amount shall be rounded to the nearest
.000001).
In addition, Rule 1057 provides that
if the Noon Buying Rate is not
announced by 2 p.m. ET, the closing
settlement value will be based upon the
most recently announced Noon Buying
Rate, unless the Exchange determines to
apply an alternative closing settlement
value as a result of extraordinary
circumstances. The Exchange is
proposing to amend Rule 1057 to
provide that the closing settlement
value will be based upon the most
recently announced Noon Buying Rate if
the Noon Buying Rate is not announced
by 5 p.m. ET (rather than 2 p.m. ET).
The Exchange believes that moving the
deadline to 5 p.m. ET should decrease
the likelihood that it may be required to
base the closing settlement value on the
previously announced Noon Buying
Rate, which is likely not to be current.
The rule will continue to permit the
Exchange to apply an alternative closing
settlement value as a result of
extraordinary circumstances.
Rule 1001, ‘‘Position Limits,’’
provides that the position limits shall be
200,000 put or call option contracts
(aggregating both U.S. dollar-settled and
physical delivery contracts) on the same
side of the market relating to the same
underlying foreign currency. Rule 1001
is being amended, however, to provide
that one U.S. dollar-settled Australian
dollar option contract shall count as
one-fifth of a contract, one U.S. dollarsettled Canadian dollar option contract
shall count as one-fifth of a contract,
one U.S. dollar-settled Swiss Franc
option contract shall count as one-sixth
of a contract, and one U.S. dollar-settled
Japanese yen option contract shall count
as one-sixth of a contract.13 The
counting of U.S. dollar-settled option
contracts as less than one full contract
reflects the fact that the size of the U.S.
dollar-settled option contract is smaller
13 Currently, Rule 1001 provides that one U.S.
dollar-settled British pound option contract shall
count as one-third of a contract, and that one U.S.
dollar-settled Euro option contract shall count as
one-sixth of a contract.
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16:59 Jul 13, 2007
Jkt 211001
than the Exchange’s physical delivery
contract on the same currencies.14 The
position limit rules were originally
adopted for the larger physical delivery
contracts.
Rule 1014, Commentary .13 is being
revised to delete the requirement that
the Options Committee and the Foreign
Currency Options Committee each
establish separate in-person amounts for
equity and index options and foreign
currency options, respectively. For
purposes of Rule 1014, Commentary .13,
the Exchange believes that there is no
useful reason to establish separate
requirements for equity and index
options on the one hand, and U.S.
dollar-settled FCOs on the other.15 This
amendment will permit the Options
Committee to establish one in-person
requirement applicable to all ROTs and
permit any ROT to satisfy that in-person
requirement by trading any kind of
option, be it equity, index or FCOs.
The Exchange also is proposing to
amend Rule 1064, ‘‘Crossing,
Facilitation and Solicited Orders,’’ to
extend the applicability of the rule to
U.S. dollar-settled FCOs. Rule 1064 sets
forth, among other things, the
procedures by which a floor broker
holding an equity or index option order
(‘‘original order’’) may cross it with
another order or orders he or she is
holding, or, in the case of a public
customer order, with a contra side order
provided by the originating firm from its
own proprietary account (‘‘facilitation
order’’). Under certain conditions, Rule
1064 provides ‘‘participation
guarantees’’ in such crossing or
facilitation transactions, entitling the
floor broker to cross a certain percentage
of the original order with the other order
14 The size of the U.S. dollar-settled Australian
dollar option contract is 10,000 Australian dollars,
which is one-fifth the size of the physical delivery
contract size of 50,000 Australian dollars. The size
of the U.S. dollar-settled Canadian dollar option
contract is 10,000 Canadian dollars, which is onefifth the size of the physical delivery contract size
of 50,000 Canadian dollars. The size of the U.S.
dollar-settled Swiss franc option contract is 10,000
Swiss francs, which is approximately one-sixth the
size of the physical delivery contract size of 62,500
Swiss francs. The size of the U.S. dollar-settled
Japanese yen option contract is 1,000,000 Japanese
yen, which is approximately one-sixth the size of
the physical delivery contract size of 6,250,000
Japanese yen.
15 Currently, Options Floor Procedure Advice B–
3 provides that a ROT (other than a Remote
Streaming Quote Trader (‘‘RSQT’’)) is required to
trade in-person, and not through the use of orders,
the greater of 1,000 contracts or 50% of his contract
volume on the Exchange each quarter. ROTs may
satisfy this requirement in any option traded on the
Exchange. Floor Procedure Advice B–3 also
contains a separate requirement that at least 50%
of a ROT’s trading activity in each quarter must be
in assigned options. This requirement will continue
to apply to ROTs assigned to equity and index
options and FCOs.
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Fmt 4703
Sfmt 4703
38855
or orders ahead of members of the
trading crowd. These participation
guarantees currently apply to
transactions in equity and index options
only. The Exchange proposes to amend
Rule 1064, Commentary .02, to provide
a participation guarantee for trading in
U.S. dollar-settled options that is the
same as the participation guarantee for
index options.
The Exchange also is proposing to
amend Rule 1092, ‘‘Obvious Errors,’’ to
clarify that the obvious error amounts
stated in the existing rule are the
amounts by which the amount is
‘‘expressed’’ and not the actual
amounts. This is merely a technical
correction.
Exchange rules designed to protect
public customers trading in FCOs will
apply to U.S. dollar-settled FCOs on the
New Currencies. Specifically, Phlx Rule
1024(b) relating to approval of customer
accounts to trade options, Phlx Rule
1026 relating to suitability, Phlx Rule
1027 relating to discretionary power
over customer accounts trading in
options, Phlx Rule 1025 relating to the
supervision of accounts, Phlx Rule 1028
relating to confirmations, and Phlx Rule
1029 relating to delivery of options
disclosure documents will apply to
trading in U.S. dollar-settled FCOs,
including FCOs on the New Currencies.
The Exchange represents that it has an
adequate surveillance program in place
for FCOs. The Exchange is also a
member of the Intermarket Surveillance
Group (‘‘ISG’’) and may obtain trading
information via the ISG from other
exchanges who are members or
affiliated members of the ISG.16 Futures
on the New Currencies trade on the
Chicago Mercantile Exchange (‘‘CME’’)
and the New York Board of Trade
(‘‘NYBOT’’). The New York Stock
Exchange (‘‘NYSE’’) and NYSE Arca list
the following exchange traded funds:
CurrencyShares Australian Dollar Trust,
CurrencyShares Canadian Dollar Trust,
and CurrencyShares Swiss Franc Trust.
The Exchange represents that, to the
best of the Exchange’s knowledge, these
U.S. markets are the primary trading
markets in the world for exchangetraded futures, options on futures and
trust shares on these currencies. Phlx
can obtain surveillance information
from the NYSE, NYSE Arca, CME and
NYBOT, as they are members of the ISG.
In addition, Phlx is able to obtain
16 The members of the ISG include all of the U.S.
registered stock and options markets. The ISG
members work together to coordinate surveillance
and investigative information sharing in the stock
and options markets. In addition, the major futures
exchanges are affiliated members of the ISG, which
allows for the sharing of surveillance information
for potential intermarket trading abuses.
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Federal Register / Vol. 72, No. 135 / Monday, July 16, 2007 / Notices
information regarding trading in these
products through Phlx members, in
connection with such members’
proprietary or customer trades which
they effect on any relevant market.17
Finally, the Exchange represents that
it has the necessary systems capacity to
support new options series that will
result from the introduction of U.S.
dollar-settled options on the New
Currencies.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act 18 in general, and furthers the
objectives of Section 6(b)(5) of the Act,19
in particular, in that it is designed to
promote just and equitable principles of
trade, 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
offering investors the ability to invest in
U.S. dollar-settled FCOs on the New
Currencies and by simplifying existing
rules relating to the expression of strike
prices and quotes in the U.S. dollarsettled FCO products.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
hsrobinson on PROD1PC76 with NOTICES
No written comments were either
solicited or received.
17 See Equity Floor Procedure Advice F–8 and
Options Floor Procedure F–8, ‘‘Failure to Comply
with an Exchange Inquiry.’’ Pursuant to Phlx Rule
1022, specialists and Registered Options Traders
(‘‘ROTs’’) are required to identify all accounts
maintained for foreign currency trading in which
the specialist or ROT engages in trading activity or
over which he exercises investment discretion, and
no specialist or ROT may engage in foreign
currency trading in any account not reported
pursuant to the rule. Phlx Rule 1022 also requires
every specialist and ROT to make available to Phlx
upon request all books, records and other
information relating to transactions for their own
account or accounts of associated persons with
respect to the foreign currency underlying U.S.
dollar-settled FCOs, including transactions in the
cash market as well as the futures, options and
options on futures markets. Rule 1022(d) includes
‘‘other foreign currency derivatives’’ in the list of
currency related transactions with respect to which
specialists and ROTs must provide information to
the Exchange.
18 15 U.S.C. 78f(b).
19 15 U.S.C. 78f(b)(5).
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16:59 Jul 13, 2007
Jkt 211001
III. 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–2007–34 on the
subject line.
rules and regulations thereunder
applicable to a national securities
exchange.20 In particular, the
Commission finds that the proposed
rule change is consistent with Section
6(b)(5) of the Act,21 which requires that
an exchange have rules designed, among
other things, to promote just and
equitable principles of trade, 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. Significant aspects of
the proposal are discussed below.
A. U.S. Dollar-Settled FCOs on the New
Currencies
The Commission notes that it recently
Paper Comments
approved rules governing the listing and
• Send paper comments in triplicate
trading on Phlx of U.S. dollar-settled
to Nancy M. Morris, Secretary,
options on the British pound and the
Securities and Exchange Commission,
Euro,22 and that such rules will be
100 F Street, NE., Washington, DC
applicable to U.S. dollar-settled options
20549–1090.
on the New Currencies.23 The
All submissions should refer to File
Commission believes that these rules
Number SR–Phlx–2007–34. This file
provide for regulation of the listing and
number should be included on the
trading of FCOs on the New Currencies
subject line if e-mail is used. To help the on Phlx consistent with the Act, as
Commission process and review your
discussed further below.
comments more efficiently, please use
only one method. The Commission will 1. Settlement Value and Dissemination
post all comments on the Commission’s of Information
Internet Web site (https://www.sec.gov/
The Commission believes that
rules/sro.shtml). Copies of the
sufficient venues exist for obtaining
submission, all subsequent
reliable information on the New
amendments, all written statements
Currencies so that investors in U.S.
with respect to the proposed rule
dollar-settled FCOs can monitor the
change that are filed with the
underlying spot market in the New
Commission, and all written
Currencies. The Commission notes that,
communications relating to the
in addition to other major market
proposed rule change between the
vendors providing such information,
Commission and any person, other than Phlx will disseminate a modified spot
those that may be withheld from the
rate for the New Currencies at least once
public in accordance with the
every fifteen seconds while the
provisions of 5 U.S.C. 552, will be
Exchange is open for trading, which will
available for inspection and copying in
give investors an additional means to
the Commission’s Public Reference
track the value of the New Currencies
Room. Copies of such filing also will be underlying the FCOs. The Commission
available for inspection and copying at
also believes that Phlx’s procedures and
the principal office of the Exchange. All the competitive nature of the spot
comments received will be posted
market for the New Currencies should
without change; the Commission does
help to ensure that the settlement values
not edit personal identifying
for U.S. dollar-settled FCO contracts
information from submissions. You
will accurately reflect the spot price for
should submit only information that
the New Currencies. Finally, the closing
you wish to make available publicly. All settlement value, as calculated pursuant
submissions should refer to File
20 In approving this rule change, the Commission
Number SR–Phlx–2007–34 and should
notes that it has considered the proposed rule’s
be submitted on or before August 6,
impact on efficiency, competition, and capital
2007.
formation. See 15 U.S.C. 78c(f).
IV. Commission’s Findings and Order
Granting Accelerated Approval of the
Proposed Rule Change
After careful consideration, the
Commission finds that the proposed
rule change, as amended, is consistent
with the requirements of the Act and the
PO 00000
Frm 00045
Fmt 4703
Sfmt 4703
21 15
U.S.C. 78f(b)(5).
Pound/Euro FCO Approval Order, supra
22 See
note 4.
23 The Commission notes that the Exchange is
making certain technical and clarifying
amendments to a number of the existing rules to
specifically apply those rules to, and reflect certain
differences in, U.S. dollar-settled options on each
currency.
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Federal Register / Vol. 72, No. 135 / Monday, July 16, 2007 / Notices
to Phlx rules, will be posted on the
Exchange’s Web site, where it will be
publicly available to all visitors on an
equal basis, without the need to enter
any kind of password.24
2. Customer Protection
The Commission believes that a
regulatory system designed to protect
public customers must be in place
before the trading of sophisticated
financial instruments, such as U.S.
dollar-settled FCOs on the New
Currencies, can commence on a national
securities exchange. The Commission
believes this goal has been satisfied by
the application of Phlx customer
protection rules to U.S. dollar-settled
FCOs on the New Currencies.
hsrobinson on PROD1PC76 with NOTICES
3. Surveillance
The Commission notes that Phlx will
integrate U.S. dollar-settled FCOs on the
New Currencies into existing Phlx
market surveillance programs for equity
and index options, physical delivery
foreign currency options, and other U.S.
dollar-settled FCOs, and that Phlx
intends to apply those same program
procedures to U.S. dollar-settled FCOs
on the New Currencies. The
Commission also notes that Phlx Rule
1022, Equity Floor Procedure Advice F–
8, and Options Floor Procedure F–8
provide Phlx with the authority to
obtain information regarding trading in
CurrencyShares Australian Dollar Trust
shares, CurrencyShares Canadian Dollar
Trust shares, CurrencyShares Swiss
Franc Trust shares, options on the New
Currencies, and futures and options on
futures on the New Currencies through
Phlx members, in connection with such
members’ proprietary or customer trades
which they effect on any relevant
market. In addition, Phlx may obtain
trading information through the ISG
from other exchanges who are members
or affiliates of the ISG. Specifically, Phlx
can obtain such information from the
NYSE and NYSE Arca in connection
with trading in the CurrencyShares
Australian Dollar Trust, CurrencyShares
Canadian Dollar Trust, and
CurrencyShares Swiss Franc Trust on
the NYSE and NYSE Arca, and from the
CME and NYBOT in connection with
trading of futures on the New
Currencies on those exchanges.
Therefore, the Commission believes that
Phlx should have the tools necessary to
adequately surveil trading in U.S.
dollar-settled FCOs on the New
Currencies.
24 Telephone conversation between Carla
Behnfeldt, Director, Phlx, and Sara Gillis, Attorney,
Division of Market Regulation, Commission, on July
3, 2007.
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16:59 Jul 13, 2007
Jkt 211001
4. Position and Exercise Limits
Like other U.S. dollar-settled FCOs,
U.S. dollar-settled FCO contracts on the
New Currencies will be aggregated with
physical delivery contracts for position
and exercise limit purposes. The
Commission believes that aggregation of
U.S. dollar-settled FCOs on the New
Currencies with the physical delivery
contracts for position and exercise limit
purposes is prudent and minimizes
concerns regarding manipulations or
disruptions of the markets for U.S.
dollar-settled FCO contracts and
physical delivery contracts.
5. Other Rules
The Commission believes that the
other rule changes proposed by Phlx to
accommodate the trading of U.S. dollarsettled FCOs on the New Currencies are
consistent with the Act. In particular,
the Commission believes it is reasonable
for Phlx to initially list exercise strike
prices for each expiration around the
current spot price at half-cent ($0.005)
intervals up to five percent on each side,
as it currently does for other U.S. dollarsettled FCOs.25 The Commission notes
that Phlx has represented that it has the
system capacity to support the
additional quotations and messages that
will result from listing options on U.S.
dollar-settled FCOs on the New
Currencies.26
The Commission also believes that it
is consistent with the Act for the
Exchange to apply the current minimum
trading increments for other U.S. dollarsettled FCOs provided in Rule 1034 to
U.S. dollar-settled FCOs on the New
Currencies. The Commission notes that
the Exchange has made appropriate
clarifying changes to the rule to account
for U.S. dollar-settled options on the
Japanese yen, which differ from the
other U.S. dollar-settled FCOs in that
four decimal places, rather than two, are
disregarded.27
B. Other Rule Changes Relating to All
U.S. Dollar-Settled FCOs
The Commission believes that the
other rule changes proposed by Phlx
applicable to all U.S. dollar-settled
FCOs listed and traded on Phlx
25 When listing additional strikes, the
Commission expects the Exchange to consider
whether the listing of such strikes will be consistent
with the maintenance of a fair and orderly market.
26 See letter dated June 21, 2007 from Thomas A.
Whitman, Senior Vice President, Phlx, to Heather
Seidel, Assistant Director, Division of Market
Regulation (‘‘Division’’), Commission.
27 See infra note 12 and accompanying text. The
Commission notes that the Exchange is also making
similar clarifying changes to other rules to account
for differences in U.S. dollar-settled options on the
Japanese yen. See e.g., Rule 1014, Rule 1033, and
Options Floor Procedure Advice F–6.
PO 00000
Frm 00046
Fmt 4703
Sfmt 4703
38857
(including U.S. dollar-settled FCOs on
the New Currencies) are consistent with
the Act. First, the Commission believes
that it is reasonable for Phlx to remove
the requirement that the Exchange delist
any series of U.S. dollar-settled FCOs
outside of the current ten percent band
that has no open interest. The
Commission notes that the Exchange
has found this requirement to be an
administrative burden and does not
believe the restriction is justified.28
The Commission also believes that it
is reasonable for the Exchange to change
from 2 p.m. ET to 5 p.m. ET the time
up to which the Exchange will use the
previously announced Noon Buying
Rate as the basis for the closing
settlement value, because this will give
the Exchange a greater opportunity to
use the Noon Buying Rate on the trading
day prior to expiration instead of having
to rely on a less-current previously
announced Noon Buying Rate.
Further, the Commission believes that
it is reasonable for the Exchange to
extend the application of Rule 1064
governing crossing, facilitation and
solicited orders to U.S. dollar-settled
FCOs. The Commission notes the
Exchange’s existing rule provides
participation guarantees in crossing or
facilitation transactions for trading in
equity and index options, and the
Commission believes that it is
consistent with the Act to provide the
same participation guarantee for trading
in U.S. dollar-settled FCOs as for index
options.
C. Accelerated Approval
Pursuant to Section 19(b)(2) of the
Act, the Commission finds good cause
to approve the proposal, as amended,
prior to the thirtieth day after the
amended proposal is published for
comment in the Federal Register. The
Commission notes that U.S. dollarsettled FCOs on the New Currencies
will be subject to the same Phlx rules
and requirements as other U.S. dollarsettled FCOs, with technical changes
where appropriate to account for U.S.
dollar-settled FCOs on the New
Currencies. The Commission also notes
that it recently approved rules for the
listing and trading of cash-settled FCOs
on the New Currencies on the
International Securities Exchange,
LLC.29 Further, the Commission notes
that it has previously approved Phlx’s
rule governing crossing, facilitation, and
28 Nonetheless, the Commission expects the
Exchange to consider whether the continued listing
of such series would be consistent with the
maintenance of a fair and orderly market.
29 See Securities Exchange Act Release No. 55515
(April 3, 2007), 72 FR 17963 (April 10, 2007) (SR–
ISE–2006–59).
E:\FR\FM\16JYN1.SGM
16JYN1
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Federal Register / Vol. 72, No. 135 / Monday, July 16, 2007 / Notices
solicited orders and providing for
participation guarantees for equity and
index options, and it believes that
extending the applicability of such
provisions to U.S. dollar-settled FCOs
raises no new or novel issues.30 The
Commission also believes that the other
proposed clarifications to Phlx’s rules
serve to enhance the proposal and raise
no new regulatory issues. Therefore, the
Commission believes that the proposed
rule changes relating to the listing and
trading of U.S. dollar-settled FCOs on
the New Currencies on Phlx do not raise
additional significant regulatory issues
that have not been previously
considered by the Commission. As such,
the Commission believes that it is
appropriate to allow the Exchange to
immediately list and trade U.S. dollarsettled FCOs on the New Currencies.
Accordingly, the Commission finds
good cause to accelerate approval of the
amended proposal prior to the thirtieth
day after publication in the Federal
Register.
design criteria for the Zeppelin
Luftschifftechnik GmbH Model LZ N07
Airship. The notice was issued on April
10, 2007 and published on May 3, 2007
(72 FR 24656). In that document, the
FAA announced the availability and
request for comments on a design
criteria for the airship.
DATES: Comments must be received on
or before August 15, 2007.
ADDRESSES: Send all comments on the
proposed design criteria to: Federal
Aviation Administration, Attention: Mr.
Karl Schletzbaum, Project Support
Office, ACE–112, 901 Locust, Kansas
City, Missouri 64106. Comments may be
inspected at the above address between
7:30 a.m. and 4 p.m. weekdays, except
Federal holidays.
FOR FURTHER INFORMATION CONTACT: Mr.
Karl Schletzbaum, 816–329–4146.
SUPPLEMENTARY INFORMATION:
Comments Invited
DEPARTMENT OF TRANSPORTATION
Interested persons are invited to
comment on the proposed design
criteria by submitting such written data,
views, or arguments as they may desire.
Commenters should identify the
proposed design criteria on the
Zeppelin Luftschifftechnik GmbH
model LZ N07 airship and submit
comments, in duplicate, to the address
specified above. All communications
received on or before the closing date
for comments will be considered by the
Small Airplane Directorate before
issuing the final design criteria.
A paper copy of the proposed design
criteria may be obtained by contacting
the person named above under the
caption FOR FURTHER INFORMATION
CONTACT.
Federal Aviation Administration
Discussion
Airworthiness Criteria: Airship Design
Criteria for Zeppelin Luftschifftechnik
GmbH Model LZ N07 Airship
Background
V. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,31 that the
proposed rule change (SR–Phlx–2007–
34), as modified by Amendment No. 1,
be, and hereby is, approved on an
accelerated basis.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.32
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–13695 Filed 7–13–07; 8:45 am]
BILLING CODE 8010–01–P
Federal Aviation
Administration (FAA), DOT.
ACTION: Notice of availability of
proposed design criteria and request for
comments; reopening of comment
period.
hsrobinson on PROD1PC76 with NOTICES
AGENCY:
SUMMARY: This action reopens the
comment period stated in the notice of
availability of proposed design criteria
and request for comments for the
airworthiness criteria on the airship
30 The
Commission notes that the participation
guarantee percentage for U.S. dollar-settled FCOs
will be the same as the current participation
guarantee percentage for index options.
31 15 U.S.C. 78s(b)(2).
32 17 CFR 200.30–3(a)(12).
VerDate Aug<31>2005
16:59 Jul 13, 2007
Jkt 211001
On April 10, 2007, the Federal
Aviation Administration (FAA) issued a
notice of availability of proposed design
criteria. The notice was published for
public comment on May 3, 2007 (72 FR
24656). Comments to that document
were due by June 4, 2007. By verbal
request, an entity involved in the
airship design industry asked the FAA
to extend the comment period for the
proposed design criteria.
We appreciate the petitioner’s
substantive interest in the proposed
design standards and believe that
granting additional time to review the
document will allow them to thoroughly
assess the impact of the design criteria
and provide meaningful comments.
Therefore, we will reopen the comment
period until August 15, 2007.
PO 00000
Frm 00047
Fmt 4703
Sfmt 4703
Reopening of Comment Period
For the reasons provided in this
notice, we believe that good cause exists
for reopening the comment period for
the proposed design criteria until
August 15, 2007. Absent unusual
circumstances, the FAA does not
anticipated any further extension of the
comment period for the design criteria.
Issued in Kansas City, Missouri, on July 7,
2007.
Sandra J. Campbell,
Acting Manager, Small Airplane Directorate,
Aircraft Certification Service.
[FR Doc. E7–13707 Filed 7–13–07; 8:45 am]
BILLING CODE 4910–13–P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
RTCA Special Committee 205/
EUROCAE Working Group 71:
Software Considerations in
Aeronautical Systems Sixth Joint
Plenary Meeting
Federal Aviation
Administration (FAA), DOT.
ACTION: Notice of RTCA Special
Committee 205/EUROCAE Working
Group 71 meeting.
AGENCY:
SUMMARY: The FAA is issuing this notice
to advise the public of a meeting of
RTCA Special Committee 205/
EUROCAE Working Group 71: Software
Considerations in Aeronautical Systems.
DATES: The meeting will be held
September 10–14, 2007 from 8 a.m.–5
p.m. (variable—see daily schedule).
ADDRESS: The meeting will be held at
Vienna University, Vienna, Austria.
FOR FURTHER INFORMATION CONTACT: (1)
RTCA Secretariat, 1828 L Street, NW.,
Suite 805, Washington, DC 20036;
telephone (202) 833–9339; fax (202)
833–9434; Web site https://www.rtca.org;
(2) Joint Secretaries, Europe: Mr. Ross
Hannon, telephone +44 78807–46650, email: rosslhannon@binternet.com; US:
Mr. Michael DeWalt, telephone (206)
972–0170, e-mail:
mike.dewalt@certification.com.
SUPPLEMENTARY INFORMATION: Pursuant
to section 10(a)(2) of the Federal
Advisory Committee Act (Pub. L. 92–
463, 5 U.S.C., Appendix 2), notice is
hereby given for a Special Committee
205/EUROCAE Working Group 71
meeting.
NOTE: On arrival at Vienna University
please have photo identification available
(either a passport, a driver’s license bearing
a photograph or an identity card) to assist in
your badge being issued.
The agenda will include:
E:\FR\FM\16JYN1.SGM
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]]>Agencies
[Federal Register Volume 72, Number 135 (Monday, July 16, 2007)]
[Notices]
[Pages 38853-38858]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-13695]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-56034; International Series Release No. 1304; File No.
SR-Phlx-2007-34]
Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.;
Notice of Filing and Order Granting Accelerated Approval of a Proposed
Rule Change, as Modified by Amendment No. 1 Thereto, Relating to U.S.
Dollar-Settled Foreign Currency Options
July 10, 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 April 13, 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. On June 13, 2007, the Exchange filed Amendment No. 1 to the
proposed rule change.\3\ The Commission is publishing this notice to
solicit comments on the proposed rule change, as amended, from
interested persons and is approving the proposal, as modified by
Amendment No. 1, on an accelerated basis.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ Amendment No. 1 replaced the original filing in its
entirety.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Phlx proposes to: (1) List and trade U.S. dollar-settled foreign
currency options (``FCOs'') on the Australian dollar, the Canadian
dollar, the Swiss franc and the Japanese yen (together, the ``New
Currencies''); (2) amend certain rules relating to the quoting
convention for U.S. dollar-settled FCOs for purposes of clarity; (3)
delete from Rule 1012 a requirement that the Exchange delist any series
of U.S. dollar-settled FCOs outside of a ten percent band around the
spot price that have no open interest; (4) amend the closing settlement
value rule by moving from 2 p.m. (Eastern time (``ET'')) to 5 p.m. ET
the time after which the Exchange will use the previously announced
Noon Buying Rate as the basis for the closing settlement value; (5)
extend the applicability of Rule 1064, ``Crossing, Facilitation and
Solicited Orders,'' to U.S. dollar-settled FCOs; and (6) clarify the
applicability of Rule 1092, ``Obvious Errors,'' to U.S. dollar-settled
FCOs.
The text of the proposed rule change is available on the Exchange's
Web site at https://www.Phlx.com/exchange/phlx--rule--fil.html, at the
Exchange, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of, and basis for, the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item III 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
On January 8, 2007, the Exchange began trading U.S. dollar-settled
options on the British pound and the Euro on the Exchange's electronic
trading platform for options, Phlx XL.\4\ These
[[Page 38854]]
new U.S. dollar-settled FCOs were in addition to the Exchange's
existing physical delivery FCOs. The Exchange now proposes to list U.S.
dollar-settled FCOs on the New Currencies. U.S. dollar-settled FCOs on
the New Currencies will be subject to the same rules that now apply to
existing U.S. dollar-settled options on foreign currencies.\5\ In
addition, a number of rules are being amended to specifically apply to
U.S. dollar-settled options on the New Currencies, as described below.
Like the British pound and the Euro, physical delivery options on the
four New Currencies are already traded on the Exchange. These existing,
physical delivery options on the New Currencies will not be affected by
this proposal and will continue to trade as they do today, by open
outcry.
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 54989 (December 21,
2006), 71 FR 78506 (December 29, 2006) (SR-Phlx-2006-34) (``Pound/
Euro FCO Approval Order''). In approving the listing and trading of
U.S. dollar-settled FCOs on the British pound and the Euro, the
Commission's approval order stated that the listing and trading of
additional U.S. dollar-settled FCOs on other foreign currencies
would require the Exchange to file additional proposed rule changes
on Form 19b-4. Id.
\5\ See Pound/Euro FCO Approval Order, supra note 4, for a
description of the rules applicable to U.S. dollar-settled FCOs.
---------------------------------------------------------------------------
The Exchange proposes to disseminate, over the facilities of the
Consolidated Tape Association, at least once every fifteen seconds
while the Exchange is open for trading, a modified spot rate for the
four New Currencies like the modified spot rate currently disseminated
for the British pound and the Euro.\6\ The modified spot rate will be
calculated by the Exchange based on spot prices (bids and asks) it
receives from Thomson Financial LLC (``Thomson''). For the Australian
dollar, the Exchange will determine the midpoint between the bid and
the ask and will modify that rate by multiplying it by 100.\7\ However,
because the Thomson spot rate selected by the Exchange \8\ is expressed
differently for the Canadian dollar, the Japanese yen and the Swiss
franc than for the Australian dollar, the British pound and the Euro
(in foreign currency units per U.S. dollar rather than in U.S. dollars
per unit of foreign currency) the modified spot rate Phlx will
disseminate for the Canadian dollar, the Japanese yen and the Swiss
franc will be one divided by the midpoint between the bid and ask of
the Thomson spot rate, rounded up to the nearest millionth if the
result ends in values greater than or equal to five ten-millionths, and
rounded down if less than five ten-millionths, multiplied by the
appropriate modifier.\9\ For the Canadian dollar and the Swiss franc,
the modifier will be 100. For the Japanese yen, the modifier will be
10,000.\10\ The Exchange believes that sufficient other venues exist
for obtaining reliable spot market information on the New Currencies so
that investors in U.S. dollar-settled FCOs can monitor the underlying
spot market in the New Currencies.
---------------------------------------------------------------------------
\6\ See Securities Exchange Act Release No. 55513 (March 22,
2007), 72 FR 14636 (March 28, 2007) (SR-Phlx-2007-28). The modified
spot rate disseminated by the Exchange will not otherwise amend or
affect the Exchange's existing rules governing U.S. dollar-settled
FCOs.
\7\ For example, if .8688 U.S. dollars buys 1 Australian dollar,
a modifier of 100 would be used so that the modified spot rate would
become 86.88.
\8\ Telephone conversation between Carla Behnfeldt, Director,
Phlx, David Hsu, Special Counsel, and Sara Gillis, Attorney,
Division of Market Regulation, Commission, on June 20, 2007.
\9\ Premiums and spot rates for the Canadian dollar, the
Japanese yen, and the Swiss franc have been quoted in foreign
currency units per U.S. dollar for years in connection with the
Exchange's physical delivery FCOs. The Exchange also represents that
other major market data vendors also quote spot rates in terms of
foreign currency units per U.S. dollar for these currencies as well.
\10\ For example, if 115.84 Japanese yen buys one U.S. dollar,
the Exchange will divide that amount into one to determine that
.008632596 dollars will buy one Japanese yen. The Exchange would
then multiply the rounded figure, .008633, by 10,000, so that the
modified spot rate to be disseminated would be 86.33.
---------------------------------------------------------------------------
Rule 1012, ``Series Of Options Open For Trading,'' Commentary .06,
currently provides that the Exchange will initially list exercise
strike prices for each expiration of U.S. dollar-settled options on the
Euro and the British pound within a ten percent band around the current
spot price at half-cent ($.005) intervals. This rule is being expanded
to cover all U.S. dollar-settled foreign currency options, including
options on the New Currencies. The Exchange also is proposing to amend
the rule by deleting a current requirement that the Exchange delist any
previously-listed series outside of the current ten percent band that
have no open interest. The Exchange has found that this requirement is
an administrative burden and does not believe that the restriction is
justified. For example, the Exchange has found that approximately once
a week, it is required to delete a series only to have it be listed
again in a day or two due to movement in the currency. Delisting and
relisting various exercise prices with no advance notice on a daily
basis has the potential to confuse investors and complicate their
trading strategies and decisions.
Rule 1033, ``Bids and Offers--Premium,'' will apply to U.S. dollar-
settled options on the New Currencies as well as to the existing U.S.
dollar-settled options on the British pound and the Euro. Pursuant to
Rule 1033(b)(ii)(A), bids and offers are to be expressed in terms of
U.S. dollars per unit of the underlying foreign currency, provided that
the first two decimal places shall be omitted from all bid and offer
quotations for the Swiss franc, the Canadian dollar, and the Australian
dollar, and the first four decimal places shall be omitted from all bid
and offer quotations for the Japanese yen. Thus, for example, a bid of
``1.60'' for an option contract on the Japanese yen shall represent a
bid to pay $.000160 per yen.\11\
---------------------------------------------------------------------------
\11\ Rule 1014, ``Obligations and Restrictions Applicable to
Specialists and Registered Options Traders,'' and Options Floor
Procedure Advice F-6, ``Option Quote Parameters,'' are being revised
to provide an illustration of the different option quote spread
parameters for U.S. dollar-settled options on the Japanese yen,
which differ from the other U.S. dollar-settled FCOs in that four
decimal places, rather than two, are to be disregarded when the
quote parameters are expressed.
Rules 1014 and 1034 are also being amended by removing the
dollar sign before the ``expressed as'' values for quotes and quote
spread parameters. Similarly, dollar signs are being added to
Options Floor Procedure Advice F-6 in front of the maximum quote
spreads (but not in front of the ``expressed as'' values for the
maximum quote spreads). The Exchange believes that these changes
will make the quoting convention (i.e., disregarding the first four
decimal places for the Japanese yen and the first two decimal places
for the other currencies underlying the U.S. dollar-settled FCOs)
less confusing to the investing public. The changes will also make
Rules 1014 and 1034 more consistent with Rule 1033.
---------------------------------------------------------------------------
Rule 1034, ``Minimum Increments,'' currently prescribes the minimum
trading increment for all U.S. dollar-settled FCOs. This rule will now
apply to the New Currencies as well. However, the rule is being amended
to add an example of the minimum trading increment in the case of U.S.
dollar-settled options on the Japanese yen, which differs from the
other U.S. dollar-settled currencies options in that four decimal
places, rather than two, are to be disregarded.\12\
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\12\ Thus, the amended rule provides that all U.S. dollar-
settled FCOs on the Japanese yen quoting at $.000300 (expressed as
3.00) or higher shall have a minimum trading increment of $.000010
per unit of the foreign currency, expressed as .10 per unit of the
foreign currency, which equals a $10.00 minimum increment per
contract consisting of 1,000,000 Japanese yen. The minimum increment
for U.S. dollar-settled FCOs on the Japanese yen quoting under
$.000300 (expressed as 3.00) shall be $.000005 per unit of the
foreign currency, expressed as .05 per unit of the foreign currency,
which equals a $5.00 minimum increment per contract consisting of
1,000,000 Japanese yen.
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Rule 1057, ``U.S. Dollar-Settled Foreign Currency Option Closing
Settlement Value,'' currently provides for the determination of the
closing settlement value for U.S. dollar-settled options on the British
pound and the Euro. The rule is being amended to provide for the
closing settlement value for U.S. dollar settled options on the New
Currencies. Because the Noon Buying Rate is expressed differently for
[[Page 38855]]
the Canadian dollar, the Japanese yen, and the Swiss franc than for the
Australian dollar, the British pound, and the Euro--in foreign currency
units per U. S. dollar rather than in U. S. dollars per unit of foreign
currency--the closing settlement value for the Canadian dollar, the
Japanese yen, and the Swiss franc will be an amount equal to one
divided by the day's announced Noon Buying Rate, as determined by the
Federal Reserve Bank of New York on the trading day prior to
expiration, rounded to the nearest .0001 (except in the case of the
Japanese yen where the amount shall be rounded to the nearest .000001).
In addition, Rule 1057 provides that if the Noon Buying Rate is not
announced by 2 p.m. ET, the closing settlement value will be based upon
the most recently announced Noon Buying Rate, unless the Exchange
determines to apply an alternative closing settlement value as a result
of extraordinary circumstances. The Exchange is proposing to amend Rule
1057 to provide that the closing settlement value will be based upon
the most recently announced Noon Buying Rate if the Noon Buying Rate is
not announced by 5 p.m. ET (rather than 2 p.m. ET). The Exchange
believes that moving the deadline to 5 p.m. ET should decrease the
likelihood that it may be required to base the closing settlement value
on the previously announced Noon Buying Rate, which is likely not to be
current. The rule will continue to permit the Exchange to apply an
alternative closing settlement value as a result of extraordinary
circumstances.
Rule 1001, ``Position Limits,'' provides that the position limits
shall be 200,000 put or call option contracts (aggregating both U.S.
dollar-settled and physical delivery contracts) on the same side of the
market relating to the same underlying foreign currency. Rule 1001 is
being amended, however, to provide that one U.S. dollar-settled
Australian dollar option contract shall count as one-fifth of a
contract, one U.S. dollar-settled Canadian dollar option contract shall
count as one-fifth of a contract, one U.S. dollar-settled Swiss Franc
option contract shall count as one-sixth of a contract, and one U.S.
dollar-settled Japanese yen option contract shall count as one-sixth of
a contract.\13\ The counting of U.S. dollar-settled option contracts as
less than one full contract reflects the fact that the size of the U.S.
dollar-settled option contract is smaller than the Exchange's physical
delivery contract on the same currencies.\14\ The position limit rules
were originally adopted for the larger physical delivery contracts.
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\13\ Currently, Rule 1001 provides that one U.S. dollar-settled
British pound option contract shall count as one-third of a
contract, and that one U.S. dollar-settled Euro option contract
shall count as one-sixth of a contract.
\14\ The size of the U.S. dollar-settled Australian dollar
option contract is 10,000 Australian dollars, which is one-fifth the
size of the physical delivery contract size of 50,000 Australian
dollars. The size of the U.S. dollar-settled Canadian dollar option
contract is 10,000 Canadian dollars, which is one-fifth the size of
the physical delivery contract size of 50,000 Canadian dollars. The
size of the U.S. dollar-settled Swiss franc option contract is
10,000 Swiss francs, which is approximately one-sixth the size of
the physical delivery contract size of 62,500 Swiss francs. The size
of the U.S. dollar-settled Japanese yen option contract is 1,000,000
Japanese yen, which is approximately one-sixth the size of the
physical delivery contract size of 6,250,000 Japanese yen.
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Rule 1014, Commentary .13 is being revised to delete the
requirement that the Options Committee and the Foreign Currency Options
Committee each establish separate in-person amounts for equity and
index options and foreign currency options, respectively. For purposes
of Rule 1014, Commentary .13, the Exchange believes that there is no
useful reason to establish separate requirements for equity and index
options on the one hand, and U.S. dollar-settled FCOs on the other.\15\
This amendment will permit the Options Committee to establish one in-
person requirement applicable to all ROTs and permit any ROT to satisfy
that in-person requirement by trading any kind of option, be it equity,
index or FCOs.
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\15\ Currently, Options Floor Procedure Advice B-3 provides that
a ROT (other than a Remote Streaming Quote Trader (``RSQT'')) is
required to trade in-person, and not through the use of orders, the
greater of 1,000 contracts or 50% of his contract volume on the
Exchange each quarter. ROTs may satisfy this requirement in any
option traded on the Exchange. Floor Procedure Advice B-3 also
contains a separate requirement that at least 50% of a ROT's trading
activity in each quarter must be in assigned options. This
requirement will continue to apply to ROTs assigned to equity and
index options and FCOs.
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The Exchange also is proposing to amend Rule 1064, ``Crossing,
Facilitation and Solicited Orders,'' to extend the applicability of the
rule to U.S. dollar-settled FCOs. Rule 1064 sets forth, among other
things, the procedures by which a floor broker holding an equity or
index option order (``original order'') may cross it with another order
or orders he or she is holding, or, in the case of a public customer
order, with a contra side order provided by the originating firm from
its own proprietary account (``facilitation order''). Under certain
conditions, Rule 1064 provides ``participation guarantees'' in such
crossing or facilitation transactions, entitling the floor broker to
cross a certain percentage of the original order with the other order
or orders ahead of members of the trading crowd. These participation
guarantees currently apply to transactions in equity and index options
only. The Exchange proposes to amend Rule 1064, Commentary .02, to
provide a participation guarantee for trading in U.S. dollar-settled
options that is the same as the participation guarantee for index
options.
The Exchange also is proposing to amend Rule 1092, ``Obvious
Errors,'' to clarify that the obvious error amounts stated in the
existing rule are the amounts by which the amount is ``expressed'' and
not the actual amounts. This is merely a technical correction.
Exchange rules designed to protect public customers trading in FCOs
will apply to U.S. dollar-settled FCOs on the New Currencies.
Specifically, Phlx Rule 1024(b) relating to approval of customer
accounts to trade options, Phlx Rule 1026 relating to suitability, Phlx
Rule 1027 relating to discretionary power over customer accounts
trading in options, Phlx Rule 1025 relating to the supervision of
accounts, Phlx Rule 1028 relating to confirmations, and Phlx Rule 1029
relating to delivery of options disclosure documents will apply to
trading in U.S. dollar-settled FCOs, including FCOs on the New
Currencies.
The Exchange represents that it has an adequate surveillance
program in place for FCOs. The Exchange is also a member of the
Intermarket Surveillance Group (``ISG'') and may obtain trading
information via the ISG from other exchanges who are members or
affiliated members of the ISG.\16\ Futures on the New Currencies trade
on the Chicago Mercantile Exchange (``CME'') and the New York Board of
Trade (``NYBOT''). The New York Stock Exchange (``NYSE'') and NYSE Arca
list the following exchange traded funds: CurrencyShares Australian
Dollar Trust, CurrencyShares Canadian Dollar Trust, and CurrencyShares
Swiss Franc Trust. The Exchange represents that, to the best of the
Exchange's knowledge, these U.S. markets are the primary trading
markets in the world for exchange-traded futures, options on futures
and trust shares on these currencies. Phlx can obtain surveillance
information from the NYSE, NYSE Arca, CME and NYBOT, as they are
members of the ISG. In addition, Phlx is able to obtain
[[Page 38856]]
information regarding trading in these products through Phlx members,
in connection with such members' proprietary or customer trades which
they effect on any relevant market.\17\
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\16\ The members of the ISG include all of the U.S. registered
stock and options markets. The ISG members work together to
coordinate surveillance and investigative information sharing in the
stock and options markets. In addition, the major futures exchanges
are affiliated members of the ISG, which allows for the sharing of
surveillance information for potential intermarket trading abuses.
\17\ See Equity Floor Procedure Advice F-8 and Options Floor
Procedure F-8, ``Failure to Comply with an Exchange Inquiry.''
Pursuant to Phlx Rule 1022, specialists and Registered Options
Traders (``ROTs'') are required to identify all accounts maintained
for foreign currency trading in which the specialist or ROT engages
in trading activity or over which he exercises investment
discretion, and no specialist or ROT may engage in foreign currency
trading in any account not reported pursuant to the rule. Phlx Rule
1022 also requires every specialist and ROT to make available to
Phlx upon request all books, records and other information relating
to transactions for their own account or accounts of associated
persons with respect to the foreign currency underlying U.S. dollar-
settled FCOs, including transactions in the cash market as well as
the futures, options and options on futures markets. Rule 1022(d)
includes ``other foreign currency derivatives'' in the list of
currency related transactions with respect to which specialists and
ROTs must provide information to the Exchange.
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Finally, the Exchange represents that it has the necessary systems
capacity to support new options series that will result from the
introduction of U.S. dollar-settled options on the New Currencies.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act \18\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\19\ in particular, in that it is designed to
promote just and equitable principles of trade, 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 offering investors the ability to invest in U.S. dollar-
settled FCOs on the New Currencies and by simplifying existing rules
relating to the expression of strike prices and quotes in the U.S.
dollar-settled FCO products.
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\18\ 15 U.S.C. 78f(b).
\19\ 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 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. 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-2007-34 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-Phlx-2007-34. 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 Room. Copies of such
filing also will be available for inspection and copying at the
principal office of the Exchange. All comments received will be posted
without change; the Commission does not edit personal identifying
information from submissions. You should submit only information that
you wish to make available publicly. All submissions should refer to
File Number SR-Phlx-2007-34 and should be submitted on or before August
6, 2007.
IV. Commission's Findings and Order Granting Accelerated Approval of
the Proposed Rule Change
After careful consideration, the Commission finds that the proposed
rule change, as amended, is consistent with the requirements of the Act
and the rules and regulations thereunder applicable to a national
securities exchange.\20\ In particular, the Commission finds that the
proposed rule change is consistent with Section 6(b)(5) of the Act,\21\
which requires that an exchange have rules designed, among other
things, to promote just and equitable principles of trade, 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. Significant aspects of the proposal are discussed
below.
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\20\ In approving this rule change, the Commission notes that it
has considered the proposed rule's impact on efficiency,
competition, and capital formation. See 15 U.S.C. 78c(f).
\21\ 15 U.S.C. 78f(b)(5).
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A. U.S. Dollar-Settled FCOs on the New Currencies
The Commission notes that it recently approved rules governing the
listing and trading on Phlx of U.S. dollar-settled options on the
British pound and the Euro,\22\ and that such rules will be applicable
to U.S. dollar-settled options on the New Currencies.\23\ The
Commission believes that these rules provide for regulation of the
listing and trading of FCOs on the New Currencies on Phlx consistent
with the Act, as discussed further below.
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\22\ See Pound/Euro FCO Approval Order, supra note 4.
\23\ The Commission notes that the Exchange is making certain
technical and clarifying amendments to a number of the existing
rules to specifically apply those rules to, and reflect certain
differences in, U.S. dollar-settled options on each currency.
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1. Settlement Value and Dissemination of Information
The Commission believes that sufficient venues exist for obtaining
reliable information on the New Currencies so that investors in U.S.
dollar-settled FCOs can monitor the underlying spot market in the New
Currencies. The Commission notes that, in addition to other major
market vendors providing such information, Phlx will disseminate a
modified spot rate for the New Currencies at least once every fifteen
seconds while the Exchange is open for trading, which will give
investors an additional means to track the value of the New Currencies
underlying the FCOs. The Commission also believes that Phlx's
procedures and the competitive nature of the spot market for the New
Currencies should help to ensure that the settlement values for U.S.
dollar-settled FCO contracts will accurately reflect the spot price for
the New Currencies. Finally, the closing settlement value, as
calculated pursuant
[[Page 38857]]
to Phlx rules, will be posted on the Exchange's Web site, where it will
be publicly available to all visitors on an equal basis, without the
need to enter any kind of password.\24\
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\24\ Telephone conversation between Carla Behnfeldt, Director,
Phlx, and Sara Gillis, Attorney, Division of Market Regulation,
Commission, on July 3, 2007.
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2. Customer Protection
The Commission believes that a regulatory system designed to
protect public customers must be in place before the trading of
sophisticated financial instruments, such as U.S. dollar-settled FCOs
on the New Currencies, can commence on a national securities exchange.
The Commission believes this goal has been satisfied by the application
of Phlx customer protection rules to U.S. dollar-settled FCOs on the
New Currencies.
3. Surveillance
The Commission notes that Phlx will integrate U.S. dollar-settled
FCOs on the New Currencies into existing Phlx market surveillance
programs for equity and index options, physical delivery foreign
currency options, and other U.S. dollar-settled FCOs, and that Phlx
intends to apply those same program procedures to U.S. dollar-settled
FCOs on the New Currencies. The Commission also notes that Phlx Rule
1022, Equity Floor Procedure Advice F-8, and Options Floor Procedure F-
8 provide Phlx with the authority to obtain information regarding
trading in CurrencyShares Australian Dollar Trust shares,
CurrencyShares Canadian Dollar Trust shares, CurrencyShares Swiss Franc
Trust shares, options on the New Currencies, and futures and options on
futures on the New Currencies through Phlx members, in connection with
such members' proprietary or customer trades which they effect on any
relevant market. In addition, Phlx may obtain trading information
through the ISG from other exchanges who are members or affiliates of
the ISG. Specifically, Phlx can obtain such information from the NYSE
and NYSE Arca in connection with trading in the CurrencyShares
Australian Dollar Trust, CurrencyShares Canadian Dollar Trust, and
CurrencyShares Swiss Franc Trust on the NYSE and NYSE Arca, and from
the CME and NYBOT in connection with trading of futures on the New
Currencies on those exchanges. Therefore, the Commission believes that
Phlx should have the tools necessary to adequately surveil trading in
U.S. dollar-settled FCOs on the New Currencies.
4. Position and Exercise Limits
Like other U.S. dollar-settled FCOs, U.S. dollar-settled FCO
contracts on the New Currencies will be aggregated with physical
delivery contracts for position and exercise limit purposes. The
Commission believes that aggregation of U.S. dollar-settled FCOs on the
New Currencies with the physical delivery contracts for position and
exercise limit purposes is prudent and minimizes concerns regarding
manipulations or disruptions of the markets for U.S. dollar-settled FCO
contracts and physical delivery contracts.
5. Other Rules
The Commission believes that the other rule changes proposed by
Phlx to accommodate the trading of U.S. dollar-settled FCOs on the New
Currencies are consistent with the Act. In particular, the Commission
believes it is reasonable for Phlx to initially list exercise strike
prices for each expiration around the current spot price at half-cent
($0.005) intervals up to five percent on each side, as it currently
does for other U.S. dollar-settled FCOs.\25\ The Commission notes that
Phlx has represented that it has the system capacity to support the
additional quotations and messages that will result from listing
options on U.S. dollar-settled FCOs on the New Currencies.\26\
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\25\ When listing additional strikes, the Commission expects the
Exchange to consider whether the listing of such strikes will be
consistent with the maintenance of a fair and orderly market.
\26\ See letter dated June 21, 2007 from Thomas A. Whitman,
Senior Vice President, Phlx, to Heather Seidel, Assistant Director,
Division of Market Regulation (``Division''), Commission.
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The Commission also believes that it is consistent with the Act for
the Exchange to apply the current minimum trading increments for other
U.S. dollar-settled FCOs provided in Rule 1034 to U.S. dollar-settled
FCOs on the New Currencies. The Commission notes that the Exchange has
made appropriate clarifying changes to the rule to account for U.S.
dollar-settled options on the Japanese yen, which differ from the other
U.S. dollar-settled FCOs in that four decimal places, rather than two,
are disregarded.\27\
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\27\ See infra note 12 and accompanying text. The Commission
notes that the Exchange is also making similar clarifying changes to
other rules to account for differences in U.S. dollar-settled
options on the Japanese yen. See e.g., Rule 1014, Rule 1033, and
Options Floor Procedure Advice F-6.
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B. Other Rule Changes Relating to All U.S. Dollar-Settled FCOs
The Commission believes that the other rule changes proposed by
Phlx applicable to all U.S. dollar-settled FCOs listed and traded on
Phlx (including U.S. dollar-settled FCOs on the New Currencies) are
consistent with the Act. First, the Commission believes that it is
reasonable for Phlx to remove the requirement that the Exchange delist
any series of U.S. dollar-settled FCOs outside of the current ten
percent band that has no open interest. The Commission notes that the
Exchange has found this requirement to be an administrative burden and
does not believe the restriction is justified.\28\
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\28\ Nonetheless, the Commission expects the Exchange to
consider whether the continued listing of such series would be
consistent with the maintenance of a fair and orderly market.
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The Commission also believes that it is reasonable for the Exchange
to change from 2 p.m. ET to 5 p.m. ET the time up to which the Exchange
will use the previously announced Noon Buying Rate as the basis for the
closing settlement value, because this will give the Exchange a greater
opportunity to use the Noon Buying Rate on the trading day prior to
expiration instead of having to rely on a less-current previously
announced Noon Buying Rate.
Further, the Commission believes that it is reasonable for the
Exchange to extend the application of Rule 1064 governing crossing,
facilitation and solicited orders to U.S. dollar-settled FCOs. The
Commission notes the Exchange's existing rule provides participation
guarantees in crossing or facilitation transactions for trading in
equity and index options, and the Commission believes that it is
consistent with the Act to provide the same participation guarantee for
trading in U.S. dollar-settled FCOs as for index options.
C. Accelerated Approval
Pursuant to Section 19(b)(2) of the Act, the Commission finds good
cause to approve the proposal, as amended, prior to the thirtieth day
after the amended proposal is published for comment in the Federal
Register. The Commission notes that U.S. dollar-settled FCOs on the New
Currencies will be subject to the same Phlx rules and requirements as
other U.S. dollar-settled FCOs, with technical changes where
appropriate to account for U.S. dollar-settled FCOs on the New
Currencies. The Commission also notes that it recently approved rules
for the listing and trading of cash-settled FCOs on the New Currencies
on the International Securities Exchange, LLC.\29\ Further, the
Commission notes that it has previously approved Phlx's rule governing
crossing, facilitation, and
[[Page 38858]]
solicited orders and providing for participation guarantees for equity
and index options, and it believes that extending the applicability of
such provisions to U.S. dollar-settled FCOs raises no new or novel
issues.\30\ The Commission also believes that the other proposed
clarifications to Phlx's rules serve to enhance the proposal and raise
no new regulatory issues. Therefore, the Commission believes that the
proposed rule changes relating to the listing and trading of U.S.
dollar-settled FCOs on the New Currencies on Phlx do not raise
additional significant regulatory issues that have not been previously
considered by the Commission. As such, the Commission believes that it
is appropriate to allow the Exchange to immediately list and trade U.S.
dollar-settled FCOs on the New Currencies.
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\29\ See Securities Exchange Act Release No. 55515 (April 3,
2007), 72 FR 17963 (April 10, 2007) (SR-ISE-2006-59).
\30\ The Commission notes that the participation guarantee
percentage for U.S. dollar-settled FCOs will be the same as the
current participation guarantee percentage for index options.
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Accordingly, the Commission finds good cause to accelerate approval
of the amended proposal prior to the thirtieth day after publication in
the Federal Register.
V. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\31\ that the proposed rule change (SR-Phlx-2007-34), as modified
by Amendment No. 1, be, and hereby is, approved on an accelerated
basis.
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\31\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\32\
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\32\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-13695 Filed 7-13-07; 8:45 am]
BILLING CODE 8010-01-P
