Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Extension of the Position Limits Pilot Program, 47114-47115 [E7-16529]

Download as PDF 47114 Federal Register / Vol. 72, No. 162 / Wednesday, August 22, 2007 / Notices SECURITIES AND EXCHANGE COMMISSION [Release No. 34–56267; File No. SR–Phlx– 2007–58] Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Extension of the Position Limits Pilot Program August 15, 2007. Rule 1001, Position Limits, which increases the standard position and exercise limits for equity option contracts, including options on the Nasdaq–100 Index Tracking Stock 5 (‘‘QQQQ’’) (‘‘Pilot Program’’). The Exchange proposes to extend the Pilot Program through March 1, 2008. The text of the proposed rule change is available at Phlx, the Commission’s Public Reference Room, and http:// www.phlx.com. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on August 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, 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. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change Phlx proposes to extend an existing pilot program applicable to Exchange six-month period, through March 1, 2008. Position limits impose a ceiling on the number of option contracts in each class on the same side of the market relating to the same underlying security that can be held or written by an investor or group of investors acting in concert. Exchange Rule 1002 (not proposed to be amended herein) establishes corresponding exercise limits. Exercise limits prohibit an investor or group of investors acting in concert from exercising more than a specified number of puts or calls in a particular class within five consecutive business days. Rule 1001 subjects equity options to one of five different position limits depending on the trading volume and outstanding shares of the underlying security. Rule 1002 establishes exercise limits for the corresponding options at the same levels as the corresponding security’s position limits.7 1. Purpose 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 Standard Position and Exercise Limit The Pilot Program increases the standard position and exercise limits for equity options traded on the Exchange and for options overlying QQQQ to the following levels: The purpose of the proposed rule change is to extend the existing Pilot Program, which is scheduled to expire September 1, 2007,6 for an additional Standard equity option contract limit 8 Pilot program equity option contract limit 13,500 22,500 31,500 60,000 75,000 25,000 50,000 75,000 200,000 250,000 Standard QQQQ option contract limit Pilot program QQQQ option contract limit 300,000 900,000 To date, the Exchange believes that there have been no adverse affects on 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b–4(f)(6). 5 The Nasdaq-100, Nasdaq-100 Index, Nasdaq, The Nasdaq Stock Market, Nasdaq-100 SharesSM, Nasdaq-100 Trust SM, Nasdaq-100 Index Tracking StockSM, and QQQSM are trademarks or service marks of The NASDAQ Stock Market LLC (‘‘Nasdaq’’) and have been licensed for use for certain purposes by Phlx pursuant to a License Agreement (‘‘License’’) with Nasdaq. The Nasdaq100 Index (‘‘Index’’) is determined, composed, and calculated by Nasdaq without regard to the Licensee, the Nasdaq-100 Trust SM, or the beneficial owners of Nasdaq-100 Shares SM. Nasdaq has complete control and sole discretion in 2 17 jlentini on PROD1PC65 with NOTICES the market as a result of these increases VerDate Aug<31>2005 16:26 Aug 21, 2007 Jkt 211001 in the limits for equity option contracts and options overlying QQQQ. determining, comprising, or calculating the Index or in modifying in any way its method for determining, comprising, or calculating the Index in the future. 6 See Securities Exchange Act Release Nos. 51322 (March 4, 2005), 70 FR 12260 (March 11, 2005) (SR Phlx–2005–17); 52261 (August 15, 2005), 70 FR 49004 (August 22, 2005) (SR–Phlx–2005–51); 53388 (February 28, 2006), 71 FR 11458 (March 7, 2006) (SR–Phlx–2006–13); 54387 (August 30, 2006), 71 FR 52842 (September 7, 2006) (SR–Phlx–2006–48); and 55285 (February 13, 2007), 72 FR 8053 (February 22, 2007) (SR–Phlx–2007–10). 7 Rule 1002 states, in relevant part, ‘‘* * * no member or member organization shall exercise, for any account in which such member or member organization has an interest or for the account of any partner, officer, director or employee thereof or for the account of any customer, a long position in any option contract of a class of options dealt in on the Exchange (or, respecting an option not dealt in on the Exchange, another exchange if the member or member organization is not a member of that exchange) if as a result thereof such member or member organization, or partner, officer, director or employee thereof or customer, acting alone or in concert with others, directly or indirectly, has or will have exercised within any five (5) consecutive business days aggregate long positions in that class (put or call) as set forth as the position limit in Rule 1001, in the case of options on a stock or on an Exchange-Traded Fund Share. * * *’’ 8 Except when the Pilot Program is in effect. PO 00000 Frm 00163 Fmt 4703 Sfmt 4703 E:\FR\FM\22AUN1.SGM 22AUN1 Federal Register / Vol. 72, No. 162 / Wednesday, August 22, 2007 / Notices 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act 9 in general, and furthers the objective of Section 6(b)(5) of the Act 10 in particular, in that it is designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanisms of a free and open market and the national market system, and, in general to protect investors and the public interest, by extending the Pilot Program for an additional six months. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. 9 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). 11 15 U.S.C. 78s(b)(3)(A). 12 17 CFR 240.19b–4(f)(6). 13 17 CFR 240.19b–4(f)(6)(iii). 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. 14 Id. jlentini on PROD1PC65 with NOTICES 10 15 VerDate Aug<31>2005 16:26 Aug 21, 2007 Jkt 211001 waiving the 30-day operative delay is consistent with the protection of investors and in the public interest because it will allow the Pilot Program to continue uninterrupted. For this reason, the Commission designates that the proposed rule change become operative immediately.15 At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the Act. 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 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–2007–58 and should be submitted on or before September 12, 2007. IV. Solicitation of Comments For the Commission, by the Division of Market Regulation, pursuant to delegated authority.16 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–16529 Filed 8–21–07; 8:45 am] 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: BILLING CODE 8010–01–P Electronic Comments III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing rule change does not: (1) Significantly affect the protection of investors or the public interest; (2) impose any significant burden on competition; and (3) become operative for 30 days from the date of this filing, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act 11 and Rule 19b– 4(f)(6) thereunder.12 A proposed rule change filed under 19b–4(f)(6) normally may not become operative prior to 30 days after the date of filing.13 However, Rule 19b– 4(f)(6)(iii) 14 permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has requested that the Commission waive the 30-day operative delay. The Commission believes that 47115 DEPARTMENT OF STATE • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File No. SR–Phlx–2007–58 on the subject line. [Public Notice 5901] 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–2007–58. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (http://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission’s Public Reference 15 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). PO 00000 Frm 00164 Fmt 4703 Sfmt 4703 Culturally Significant Objects Imported for Exhibition Determinations: ‘‘Artisans and Kings: Selected Treasures From the Louvre’’ SUMMARY: Notice is hereby given of the following determinations: Pursuant to the authority vested in me by the Act of October 19, 1965 (79 Stat. 985; 22 U.S.C. 2459), Executive Order 12047 of March 27, 1978, the Foreign Affairs Reform and Restructuring Act of 1998 (112 Stat. 2681, et seq.; 22 U.S.C. 6501 note, et seq.), Delegation of Authority No. 234 of October 1, 1999, Delegation of Authority No. 236 of October 19, 1999, as amended, and Delegation of Authority No. 257 of April 15, 2003 [68 FR 19875], I hereby determine that the three additional objects to be included in the exhibition ‘‘Artisans and Kings: Selected Treasures from the Louvre,’’ imported from abroad for temporary exhibition within the United States, are of cultural significance. The objects are imported pursuant to a loan agreement with the foreign owner or custodian. I also determine that the exhibition or display of the three additional exhibit objects at the Denver Art Museum, Denver, Colorado, from on or about October 6, 2007, until on or about January 6, 2008, and at possible additional exhibitions or venues yet to be determined, is in the national interest. Public Notice of these Determinations is ordered to be published in the Federal Register. 16 17 E:\FR\FM\22AUN1.SGM CFR 200.30–3(a)(12). 22AUN1

Agencies

[Federal Register Volume 72, Number 162 (Wednesday, August 22, 2007)]
[Notices]
[Pages 47114-47115]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-16529]



[[Page 47114]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56267; File No. SR-Phlx-2007-58]


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

 August 15, 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 August 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, 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).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Phlx proposes to extend an existing pilot program applicable to 
Exchange Rule 1001, Position Limits, which increases the standard 
position and exercise limits for equity option contracts, including 
options on the Nasdaq-100 Index Tracking Stock \5\ (``QQQQ'') (``Pilot 
Program''). The Exchange proposes to extend the Pilot Program through 
March 1, 2008. The text of the proposed rule change is available at 
Phlx, the Commission's Public Reference Room, and http://www.phlx.com.
---------------------------------------------------------------------------

    \5\ The Nasdaq-100[supreg], Nasdaq-100 Index[supreg], 
Nasdaq[supreg], The Nasdaq Stock Market[supreg], Nasdaq-100 
Shares\SM\, Nasdaq-100 Trust \SM\, Nasdaq-100 Index Tracking 
Stock\SM\, and QQQ\SM\ are trademarks or service marks of The NASDAQ 
Stock Market LLC (``Nasdaq'') and have been licensed for use for 
certain purposes by Phlx pursuant to a License Agreement 
(``License'') with Nasdaq. The Nasdaq-100 Index[supreg] (``Index'') 
is determined, composed, and calculated by Nasdaq without regard to 
the Licensee, the Nasdaq-100 Trust \SM\, or the beneficial owners of 
Nasdaq-100 Shares \SM\. Nasdaq has complete control and sole 
discretion in determining, comprising, or calculating the Index or 
in modifying in any way its method for determining, comprising, or 
calculating the Index in the future.
---------------------------------------------------------------------------

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 proposed rule change is to extend the existing 
Pilot Program, which is scheduled to expire September 1, 2007,\6\ for 
an additional six-month period, through March 1, 2008.
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    \6\ See Securities Exchange Act Release Nos. 51322 (March 4, 
2005), 70 FR 12260 (March 11, 2005) (SR Phlx-2005-17); 52261 (August 
15, 2005), 70 FR 49004 (August 22, 2005) (SR-Phlx-2005-51); 53388 
(February 28, 2006), 71 FR 11458 (March 7, 2006) (SR-Phlx-2006-13); 
54387 (August 30, 2006), 71 FR 52842 (September 7, 2006) (SR-Phlx-
2006-48); and 55285 (February 13, 2007), 72 FR 8053 (February 22, 
2007) (SR-Phlx-2007-10).
---------------------------------------------------------------------------

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

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

    \8\ Except when the Pilot Program is in effect.

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

    To date, the Exchange believes that there have been no adverse 
affects on the market as a result of these increases in the limits for 
equity option contracts and options overlying QQQQ.

[[Page 47115]]

2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \9\ in general, and furthers the objective of Section 
6(b)(5) of the Act \10\ in particular, in that it is designed to 
promote just and equitable principles of trade, to remove impediments 
to and perfect the mechanisms of a free and open market and the 
national market system, and, in general to protect investors and the 
public interest, by extending the Pilot Program for an additional six 
months.
---------------------------------------------------------------------------

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

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

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

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

    Because the foregoing rule change does not: (1) Significantly 
affect the protection of investors or the public interest; (2) impose 
any significant burden on competition; and (3) become operative for 30 
days from the date of this filing, or such shorter time as the 
Commission may designate, it has become effective pursuant to Section 
19(b)(3)(A) of the Act \11\ and Rule 19b-4(f)(6) thereunder.\12\
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    A proposed rule change filed under 19b-4(f)(6) normally may not 
become operative prior to 30 days after the date of filing.\13\ 
However, Rule 19b-4(f)(6)(iii) \14\ permits the Commission to designate 
a shorter time if such action is consistent with the protection of 
investors and the public interest. The Exchange 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 because it will 
allow the Pilot Program to continue uninterrupted. For this reason, the 
Commission designates that the proposed rule change become operative 
immediately.\15\
---------------------------------------------------------------------------

    \13\ 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.
    \14\ Id.
    \15\ 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).
---------------------------------------------------------------------------

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

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File No. SR-Phlx-2007-58 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-2007-58. This file 
number should be included on the subject line if e-mail is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/
sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for inspection and 
copying in the Commission's Public Reference Room, 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 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-2007-58 and should be 
submitted on or before September 12, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-16529 Filed 8-21-07; 8:45 am]
BILLING CODE 8010-01-P