Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto To Eliminate Position and Exercise Limits for Options on the Russell 2000 Index, and To Specify That Certain Reduced-Value Options on Broad-Based Security Indexes Have No Position and Exercise Limits, 59329-59331 [E7-20587]

Download as PDF Federal Register / Vol. 72, No. 202 / Friday, October 19, 2007 / Notices 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–NASD–2005–100 and should be submitted on or before December 3, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.32 Nancy M. Morris, Secretary. [FR Doc. E7–20601 Filed 10–18–07; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–56656; File No. SR– NYSEArca–2007–94] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto To Eliminate Position and Exercise Limits for Options on the Russell 2000 Index, and To Specify That Certain Reduced-Value Options on Broad-Based Security Indexes Have No Position and Exercise Limits October 12, 2007. pwalker on PROD1PC71 with NOTICES Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on September 14, 2007, NYSE Arca, Inc. (‘‘NYSE Arca’’ 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 NYSE Arca. On October 1, 2007, NYSE Arca submitted Amendment No. 1 to the proposed rule change. The Exchange has filed the proposal as a ‘‘noncontroversial’’ 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, as amended, from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change NYSE Arca proposes to amend its rules to eliminate the position and 32 32 17 CFR 200.30–3(a)(12). 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). exercise limits for options on the Russell 2000 Index (‘‘RUT’’), and to specify that reduced-value options on broad-based security indexes for which full-value options have no position and exercise limits will similarly have no position and exercise limits. The text of the proposed rule change is available at NYSE Arca, the Commission’s Public Reference Room, and http:// www.nysearca.com. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, NYSE Arca 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. NYSE Arca 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 NYSE Arca proposes to amend Rules 5.15(a) and 5.17(a)(13) in order to: (1) Eliminate position and exercise limits for options on RUT, a multiply listed and heavily traded broad-based security index; and (2) specify that reducedvalue options on broad-based security indexes for which full-value options have no position limits will similarly have no position limits. Eliminate Position and Exercise Limits for RUT Options NYSE Arca presently trades options on one broad-based index, RUT. However, the Exchange believes that the circumstances and considerations that the Commission relied upon in approving the elimination of position and exercise limits for another heavily traded broad-based index options (e.g., NASDAQ–100 Index (‘‘NDX’’), listed on the Chicago Board Options Exchange (‘‘CBOE’’)) 5 equally apply to NYSE Arca’s proposal to eliminate position and exercise limits for options on RUT. In addition, the Commission recently approved similar proposals by CBOE and the American Stock Exchange LLC 1 15 VerDate Aug<31>2005 16:46 Oct 18, 2007 5 See Securities Exchange Act Release No. 52650 (October 21, 2005), 70 FR 62147 (October 28, 2005) (SR–CBOE–2005–41) (‘‘NDX Approval Order’’). Jkt 214001 PO 00000 Frm 00091 Fmt 4703 Sfmt 4703 59329 (‘‘Amex’’) to eliminate position and exercise limits for RUT options.6 In approving the elimination of position and exercise limits for NDX options on CBOE, the Commission considered the capitalization of this index and the deep and liquid markets for the securities underlying the index that significantly reduced the concerns of market manipulation or disruption in the underlying markets.7 The Commission also noted the active trading volume for options on the index. The Exchange believes that RUT shares these factors in common with NDX. As of July 31, 2007, the approximate market capitalization of NDX was $2.28 trillion, the average daily trading volume (‘‘ADTV’’) for the component of NDX was 572 million shares and the ADTV for options on NDX was approximately 64,000 contracts per day. NYSE Arca believes that RUT has comparable characteristics. The market capitalization for RUT is $1.73 trillion, the ADTV for the underlying securities is 535 million shares, and the ADTV for the option is approximately 79,000 contracts. In approving the elimination of position and exercise limits for NDX, the Commission also noted that financial requirements imposed by the options exchanges and the Commission serve to address concerns that an exchange member, an Options Trading Permit (‘‘OTP’’) Holder 8 in the case of NYSE Arca, or its customer, may try to maintain an inordinately large unhedged position in NDX options. These same financial requirements also apply to RUT options. Under NYSE Arca rules, the Exchange also has the authority to impose additional margin upon accounts maintaining underhedged positions, and is further able to monitor accounts to determine when such action is warranted. As noted in the Exchange’s rules, the clearing firm carrying such an account would be subject to capital charges under Rule 15c3–1 under the Act 9 to the extent of any resulting margin deficiency.10 In approving the elimination of position and exercise limits for NDX, the Commission relied heavily on 6 See Securities Exchange Act Release Nos. 56351 (September 4, 2007), 72 FR 51875 (September 11, 2007) (SR–Amex-2007–81); and 56350 (September 4, 2007), 72 FR 51878 (September 11, 2007) (SR– CBOE–2007–79) (collectively, ‘‘RUT Approval Orders’’). 7 See NDX Approval Order, supra note 5. 8 OTP Holder is defined in NYSE Arca Rule 1.1(q). OTP Holders have the status of a ‘‘member’’ of the Exchange as that term is defined in Section 3 of the Act. See 15 U.S.C. 78c. 9 17 CFR 240.15c3–1. 10 See NYSE Arca Rule 5.17(a)(14). E:\FR\FM\19OCN1.SGM 19OCN1 59330 Federal Register / Vol. 72, No. 202 / Friday, October 19, 2007 / Notices pwalker on PROD1PC71 with NOTICES CBOE’s ability to provide surveillance and reporting safeguards to detect and deter trading abuses arising from the elimination of position and exercise limits on the index. NYSE Arca represents that the current Exchange surveillance procedures are adequate to continue monitoring RUT options, once the position and exercise limits are eliminated. In addition, the Exchange intends to impose a reporting requirement on NYSE Arca OTP Holders and OTP Firms (other than NYSE Arca market-makers) that trade RUT options. This reporting requirement would require OTP Holders and OTP Firms who maintain in excess of 100,000 RUT option contracts on the same side of the market, for their own accounts or for the account of customers, to report information as to whether the positions are hedged and provide documentation as to how such contracts are hedged, in a manner and form required by the Exchange’s Options Surveillance Department. The Exchange would take prompt action, including timely communication with the Commission and other marketplace self-regulatory organizations responsible for oversight of trading in component stocks, should any unanticipated adverse market effects develop.11 The Exchange may also specify other reporting requirements, as well as the limit at which the reporting requirement may be triggered. The Exchange believes that eliminating position and exercise limits for RUT options is consistent with approved rules relating to similar broadbased index products currently trading on other exchanges. The Exchange believes that eliminating the position and exercise limits for options on RUT will allow NYSE Arca OTP Holders and OTP Firms greater hedging and investment opportunities. Elimination of Position Limits for reduced value Options on Broad-Based Indexes for which there are not Position and Exercise Limits for Full Value Options The Exchange may list and trade reduced-value options on broad-based indexes for which the Exchange also lists and trades full-value options.12 The Exchange proposes to amend Rule 5.15(a) to state that reduced-value options on broad-based security indexes for which full value options have no position and exercise limits will 11 Telephone conversation between Andrew Stevens, Assistant General Counsel, NYSE Arca, and Theodore S. Venuti, Special Counsel, Division of Market Regulation, Commission, on October 12, 2007. 12 NYSE Arca does not presently list or trade reduced-value options. VerDate Aug<31>2005 16:46 Oct 18, 2007 Jkt 214001 similarly have no position and exercise limits. is consistent with the protection of investors and the public interest. The Exchange has requested that the 2. Statutory Basis Commission waive the 30-day operative The Exchange believes the proposed delay. The Commission believes that rule change is consistent with Section waiving the 30-day operative delay is 6(b) of the Act,13 in general, and furthers consistent with the protection of the objectives of Section 6(b)(5) of the investors and the public interest Act,14 in particular, in that it is designed because such waiver will allow NYSE to promote just and equitable principles Arca members and their customers of trade, to prevent fraudulent and greater hedging and investment manipulative acts and practices, to opportunities in RUT options without remove impediments to and perfect the further delay. The Commission notes mechanism of a free and open market that it recently approved substantially and a national market system, and, in similar proposals filed by Amex and general, to protect investors and the CBOE.19 The Commission believes that public interest. NYSE Arca’s proposal to eliminate position and exercise limits for RUT B. Self-Regulatory Organization’s options raises no new issues. For these Statement on Burden on Competition reasons, the Commission designates the The Exchange does not believe that proposed rule change to be operative the proposed rule change will impose upon filing with the Commission.20 any burden on competition that is not At any time within 60 days of the necessary or appropriate in furtherance filing of such proposed rule change the of the purposes of the Act. Commission may summarily abrogate such rule change if it appears to the C. Self-Regulatory Organization’s Commission that such action is Statement on Comments on the necessary or appropriate in the public Proposed Rule Change Received From interest, for the protection of investors Members, Participants or Others or otherwise in furtherance of the Written comments on the proposed purposes of the Act.21 rule change were neither solicited nor IV. Solicitation of Comments received. Interested persons are invited to III. Date of Effectiveness of the submit written data, views, and Proposed Rule Change and Timing for arguments concerning the foregoing, Commission Action including whether the proposed rule Because the forgoing rule change does change is consistent with the Act. not: (1) Significantly affect the Comments may be submitted by any of protection of investors or the public the following methods: interest; (2) impose any significant Electronic Comments burden on competition; and (3) become operative for 30 days after the date of • Use the Commission’s Internet this filing, or such shorter time as the comment form (http://www.sec.gov/ Commission may designate, it has rules/sro.shtml); or become effective pursuant to Section • Send an e-mail to rule19(b)(3)(A) of the Act 15 and Rule 19b– comments@sec.gov. Please include File 4(f)(6) thereunder.16 Number SR–NYSEArca-2007–94 on the A proposed rule change filed under subject line. 19b–4(f)(6) normally may not become Paper Comments operative prior to 30 days after the date • Send paper comments in triplicate of filing.17 However, Rule 19b– to Nancy M. Morris, Secretary, 4(f)(6)(iii) 18 permits the Commission to Securities and Exchange Commission, designate a shorter time if such action 100 F Street, NE., Washington, DC 13 15 U.S.C. 78f(b). 20549–1090. 14 15 U.S.C. 78f(b)(5). All submissions should refer to File 15 15 U.S.C. 78s(b)(3)(A). Number SR–NYSEArca-2007–94. This 16 17 CFR 240.19b–4(f)(6). file number should be included on the 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. The Exchange has requested the Commission to waive this five-day pre-filing notice requirement. The Commission hereby grants this request. 18 Id. PO 00000 Frm 00092 Fmt 4703 Sfmt 4703 19 See RUT Approval Orders, supra note 6. the purposes only of waiving the 30-day operative delay, the Commission 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. 78s(b)(3)(C). For purposes of calculating the 60-day period within which the Commission may summarily abrogate the proposal, the Commission considers the period to commence on October 1, 2007, the date on which the Exchange submitted Amendment No. 1. 20 For E:\FR\FM\19OCN1.SGM 19OCN1 Federal Register / Vol. 72, No. 202 / Friday, October 19, 2007 / Notices 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 the filing also will be available for inspection and copying at the principal office of NYSE Arca. 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–NYSEArca-2007–94 and should be submitted on or before November 9, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.22 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–20587 Filed 10–18–07; 8:45 am] BILLING CODE 8011–01–P DEPARTMENT OF STATE [Public Notice 5912] pwalker on PROD1PC71 with NOTICES Industry Advisory Panel: Notice of Charter Renewal The Assistant Secretary for Management has approved the renewal of the charter for the Industry Advisory Panel of Overseas Buildings Operations for an additional two-year period. The panel meets quarterly in the Harry S. Truman Building, U.S. Department of State, located at 2201 C Street, NW. (entrance on 23rd Street), Washington, DC. The majority of each meeting is devoted to an exchange of ideas between the Department’s Bureau of Overseas Building Operations’ senior management and the panel members, on design, operations, and building 22 17 maintenance. The meetings are open to the public and are subject to advance registration and provision of required security information. Procedures for registration are included with each meeting announcement, no later than fifteen business days before each meeting. If you have any questions, please contact Andrea Walk at walkam@state.gov or on (703) 516–1544. Dated: October 2, 2007. Charles E. Williams, Director and Chief Operating Officer Overseas Buildings Operations, Department of State [FR Doc. E7–20641 Filed 10–18–07; 8:45 am] BILLING CODE 4710–24–P DEPARTMENT OF STATE [Public Notice 5911] Overseas Security Advisory Council (OSAC) Meeting Notice; Closed Meeting The Department of State announces a meeting of the U.S. State Department— Overseas Security Advisory Council on November 13, 2007 at the U.S. Department of State, Washington, DC. Pursuant to Section 10(d) of the Federal Advisory Committee Act and 5 U.S.C. 552b(c)(4) and 5 U.S.C. 552b(c)(7)(E), it has been determined that the meeting will be closed to the public. The meeting will focus on an examination of corporate security policies and procedures and will involve extensive discussion of proprietary commercial information that is considered privileged and confidential, and will discuss law enforcement investigative techniques and procedures. The agenda will include updated committee reports, a global threat overview, and other matters relating to private sector security policies and protective programs and the protection of U.S. business information overseas. For more information, contact Marsha Thurman, Overseas Security Advisory Council, Department of State, Washington, DC 20522–2008, phone: 571–345–2214. Dated: October 4, 2007. Gregory B. Starr, Director of the Diplomatic Security Service, Department of State. [FR Doc. E7–20640 Filed 10–18–07; 8:45 am] BILLING CODE 4710–43–P CFR 200.30–3(a)(12). VerDate Aug<31>2005 16:46 Oct 18, 2007 Jkt 214001 PO 00000 Frm 00093 Fmt 4703 Sfmt 4703 59331 DEPARTMENT OF STATE [Public Notice 5962] U.S. Department of State Advisory Committee on Private International Law: Study Group on Consumer Protection One of the goals of the Organization of American States is to harmonize private international law through InterAmerican Specialized Conferences on Private International Law (CIDIP). Currently states are drafting instruments for ‘‘CIDIP–VII,’’ which will focus inter alia on consumer protection. States are currently reviewing a draft Brazilian treaty on choice of law, a Canadian draft model law on choice of law and jurisdiction, and a U.S. proposal for a model law on the availability of consumer dispute resolution and redress. OAS member states discussed the three proposals at an initial meeting held in Porto Alegre, Brazil in December 2006. No dates have been set for future meetings, but the views of participating states have been requested. The Department of State Advisory Committee on Private International Law (ACPIL) will hold a public meeting to review the results of the Porto Alegre meeting and to obtain views on the three proposals with regard to consumer protection. Time: The public meeting will take place at the Department of State, Office of Private International Law, 2430 E Street, NW., Washington, DC on Wednesday October 31, 2007 from 10 a.m. to 3 p.m. EST. If you are unable to attend the public meeting and you would like to participate by teleconferencing, please contact Trisha Smeltzer to receive the conference call in number and the relevant materials (the Brazilian proposal for a treaty on choice of law, the Canadian proposal for a model law on jurisdiction and choice of law, and the U.S. proposal for a model law on the availability of consumer dispute resolution and redress.) Public Participation: Advisory Committee Study Group meetings are open to the public. Persons wishing to attend should contact Trisha Smeltzer at smeltzertk@state.gov or at 202–776– 8423 and provide your name, mailing address, e-mail address, and affiliation(s) no later than October 29th. Since access to the building is controlled, clearance for admission to the meeting will be needed. Additional meeting information can also be obtained from Ms. Smeltzer. Persons who cannot attend but who wish to comment on any of the proposals are E:\FR\FM\19OCN1.SGM 19OCN1

Agencies

[Federal Register Volume 72, Number 202 (Friday, October 19, 2007)]
[Notices]
[Pages 59329-59331]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-20587]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56656; File No. SR-NYSEArca-2007-94]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 
Thereto To Eliminate Position and Exercise Limits for Options on the 
Russell 2000 Index, and To Specify That Certain Reduced-Value Options 
on Broad-Based Security Indexes Have No Position and Exercise Limits

October 12, 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 September 14, 2007, NYSE Arca, Inc. (``NYSE Arca'' 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 NYSE Arca. On October 1, 2007, NYSE 
Arca submitted Amendment No. 1 to the proposed rule change. 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, as amended, from interested 
persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

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

    NYSE Arca proposes to amend its rules to eliminate the position and 
exercise limits for options on the Russell 2000 Index (``RUT''), and to 
specify that reduced-value options on broad-based security indexes for 
which full-value options have no position and exercise limits will 
similarly have no position and exercise limits. The text of the 
proposed rule change is available at NYSE Arca, the Commission's Public 
Reference Room, and http://www.nysearca.com.

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

    In its filing with the Commission, NYSE Arca 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. NYSE Arca 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
    NYSE Arca proposes to amend Rules 5.15(a) and 5.17(a)(13) in order 
to: (1) Eliminate position and exercise limits for options on RUT, a 
multiply listed and heavily traded broad-based security index; and (2) 
specify that reduced-value options on broad-based security indexes for 
which full-value options have no position limits will similarly have no 
position limits.
    Eliminate Position and Exercise Limits for RUT Options
    NYSE Arca presently trades options on one broad-based index, RUT. 
However, the Exchange believes that the circumstances and 
considerations that the Commission relied upon in approving the 
elimination of position and exercise limits for another heavily traded 
broad-based index options (e.g., NASDAQ-100 Index (``NDX''), listed on 
the Chicago Board Options Exchange (``CBOE'')) \5\ equally apply to 
NYSE Arca's proposal to eliminate position and exercise limits for 
options on RUT. In addition, the Commission recently approved similar 
proposals by CBOE and the American Stock Exchange LLC (``Amex'') to 
eliminate position and exercise limits for RUT options.\6\
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 52650 (October 21, 
2005), 70 FR 62147 (October 28, 2005) (SR-CBOE-2005-41) (``NDX 
Approval Order'').
    \6\ See Securities Exchange Act Release Nos. 56351 (September 4, 
2007), 72 FR 51875 (September 11, 2007) (SR-Amex-2007-81); and 56350 
(September 4, 2007), 72 FR 51878 (September 11, 2007) (SR-CBOE-2007-
79) (collectively, ``RUT Approval Orders'').
---------------------------------------------------------------------------

    In approving the elimination of position and exercise limits for 
NDX options on CBOE, the Commission considered the capitalization of 
this index and the deep and liquid markets for the securities 
underlying the index that significantly reduced the concerns of market 
manipulation or disruption in the underlying markets.\7\ The Commission 
also noted the active trading volume for options on the index. The 
Exchange believes that RUT shares these factors in common with NDX. As 
of July 31, 2007, the approximate market capitalization of NDX was 
$2.28 trillion, the average daily trading volume (``ADTV'') for the 
component of NDX was 572 million shares and the ADTV for options on NDX 
was approximately 64,000 contracts per day. NYSE Arca believes that RUT 
has comparable characteristics. The market capitalization for RUT is 
$1.73 trillion, the ADTV for the underlying securities is 535 million 
shares, and the ADTV for the option is approximately 79,000 contracts.
---------------------------------------------------------------------------

    \7\ See NDX Approval Order, supra note 5.
---------------------------------------------------------------------------

    In approving the elimination of position and exercise limits for 
NDX, the Commission also noted that financial requirements imposed by 
the options exchanges and the Commission serve to address concerns that 
an exchange member, an Options Trading Permit (``OTP'') Holder \8\ in 
the case of NYSE Arca, or its customer, may try to maintain an 
inordinately large unhedged position in NDX options. These same 
financial requirements also apply to RUT options. Under NYSE Arca 
rules, the Exchange also has the authority to impose additional margin 
upon accounts maintaining underhedged positions, and is further able to 
monitor accounts to determine when such action is warranted. As noted 
in the Exchange's rules, the clearing firm carrying such an account 
would be subject to capital charges under Rule 15c3-1 under the Act \9\ 
to the extent of any resulting margin deficiency.\10\
---------------------------------------------------------------------------

    \8\ OTP Holder is defined in NYSE Arca Rule 1.1(q). OTP Holders 
have the status of a ``member'' of the Exchange as that term is 
defined in Section 3 of the Act. See 15 U.S.C. 78c.
    \9\ 17 CFR 240.15c3-1.
    \10\ See NYSE Arca Rule 5.17(a)(14).
---------------------------------------------------------------------------

    In approving the elimination of position and exercise limits for 
NDX, the Commission relied heavily on

[[Page 59330]]

CBOE's ability to provide surveillance and reporting safeguards to 
detect and deter trading abuses arising from the elimination of 
position and exercise limits on the index. NYSE Arca represents that 
the current Exchange surveillance procedures are adequate to continue 
monitoring RUT options, once the position and exercise limits are 
eliminated. In addition, the Exchange intends to impose a reporting 
requirement on NYSE Arca OTP Holders and OTP Firms (other than NYSE 
Arca market-makers) that trade RUT options. This reporting requirement 
would require OTP Holders and OTP Firms who maintain in excess of 
100,000 RUT option contracts on the same side of the market, for their 
own accounts or for the account of customers, to report information as 
to whether the positions are hedged and provide documentation as to how 
such contracts are hedged, in a manner and form required by the 
Exchange's Options Surveillance Department. The Exchange would take 
prompt action, including timely communication with the Commission and 
other marketplace self-regulatory organizations responsible for 
oversight of trading in component stocks, should any unanticipated 
adverse market effects develop.\11\ The Exchange may also specify other 
reporting requirements, as well as the limit at which the reporting 
requirement may be triggered.
---------------------------------------------------------------------------

    \11\ Telephone conversation between Andrew Stevens, Assistant 
General Counsel, NYSE Arca, and Theodore S. Venuti, Special Counsel, 
Division of Market Regulation, Commission, on October 12, 2007.
---------------------------------------------------------------------------

    The Exchange believes that eliminating position and exercise limits 
for RUT options is consistent with approved rules relating to similar 
broad-based index products currently trading on other exchanges. The 
Exchange believes that eliminating the position and exercise limits for 
options on RUT will allow NYSE Arca OTP Holders and OTP Firms greater 
hedging and investment opportunities.
    Elimination of Position Limits for reduced value Options on Broad-
Based Indexes for which there are not Position and Exercise Limits for 
Full Value Options
    The Exchange may list and trade reduced-value options on broad-
based indexes for which the Exchange also lists and trades full-value 
options.\12\ The Exchange proposes to amend Rule 5.15(a) to state that 
reduced-value options on broad-based security indexes for which full 
value options have no position and exercise limits will similarly have 
no position and exercise limits.
---------------------------------------------------------------------------

    \12\ NYSE Arca does not presently list or trade reduced-value 
options.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
Section 6(b) of the Act,\13\ in general, and furthers the objectives of 
Section 6(b)(5) of the Act,\14\ in particular, in that it is designed 
to promote just and equitable principles of trade, to prevent 
fraudulent and manipulative acts and practices, 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.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78f(b).
    \14\ 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

    Written comments on the proposed rule change were neither solicited 
nor received.

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

    Because the forgoing 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 
after 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 \15\ and Rule 19b-4(f)(6) thereunder.\16\
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78s(b)(3)(A).
    \16\ 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.\17\ 
However, Rule 19b-4(f)(6)(iii) \18\ 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 the public interest because such waiver 
will allow NYSE Arca members and their customers greater hedging and 
investment opportunities in RUT options without further delay. The 
Commission notes that it recently approved substantially similar 
proposals filed by Amex and CBOE.\19\ The Commission believes that NYSE 
Arca's proposal to eliminate position and exercise limits for RUT 
options raises no new issues. For these reasons, the Commission 
designates the proposed rule change to be operative upon filing with 
the Commission.\20\
---------------------------------------------------------------------------

    \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. The Exchange has requested the Commission to waive 
this five-day pre-filing notice requirement. The Commission hereby 
grants this request.
    \18\ Id.
    \19\ See RUT Approval Orders, supra note 6.
    \20\ For the purposes only of waiving the 30-day operative 
delay, the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of such proposed rule 
change the Commission may summarily abrogate such rule change if it 
appears to the Commission that such action is necessary or appropriate 
in the public interest, for the protection of investors or otherwise in 
furtherance of the purposes of the Act.\21\
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    \21\ 15 U.S.C. 78s(b)(3)(C). For purposes of calculating the 60-
day period within which the Commission may summarily abrogate the 
proposal, the Commission considers the period to commence on October 
1, 2007, the date on which the Exchange submitted Amendment No. 1.
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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 Number SR-NYSEArca-2007-94 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-NYSEArca-2007-94. This 
file number should be included on the

[[Page 59331]]

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 the 
filing also will be available for inspection and copying at the 
principal office of NYSE Arca. 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-NYSEArca-2007-94 and should be submitted on or before 
November 9, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\22\
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    \22\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-20587 Filed 10-18-07; 8:45 am]
BILLING CODE 8011-01-P