Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Expand and Permanently Adopt the $1 Strike Pilot Program, 2297-2299 [E8-350]

Download as PDF Federal Register / Vol. 73, No. 9 / Monday, January 14, 2008 / Notices generally is not included in newspaper fund/trust tables, but is disseminated over Nasdaq’s MFDS data feed. Historically, Nasdaq spent more time and effort compiling and disseminating the News Media List, which justified its higher fee. Over time, Nasdaq has enhanced its processes and technology; as a result, the effort it takes to compile the two lists generally is the same. Nasdaq follows similar processes in the development of the Lists: both require the same processing to set up, both are disseminated to the public over the same data feed using the same message formats, and both require the same technical support. Given the uniformity of effort, Nasdaq believes that the pricing distinction between the two Lists is no longer valid and seeks with this filing to establish a uniform price for both. The new uniform price represents a decrease in fees for the News Media List and an increase for the Supplemental List, which reflects Nasdaq’s enhanced system and extended reporting session. With this filing, Nasdaq seeks to raise the Supplemental List fee by $100 and lower the News Media List by $25 as compared to the fees currently being charged, effective on January 1, 2008. The increase reflects additional services rendered in providing the Supplemental List, and the decrease is for sake of conformity. Fees were last raised over two years ago. 2. Statutory Basis Nasdaq believes that the proposed rule change is consistent with section 6(b) of the Act 5 in general, and with section 6(b)(4) of the Act,6 in particular, in that the proposal provides for the equitable allocation of reasonable dues, fees and other charges among members and issuers and other persons using any facility or system which Nasdaq operates or controls. The proposed rule change establishes new uniform MFQS fees based on increased services rendered and uniformity of effort, and also corrects certain errors in the rule manual on a retroactive basis. rmajette on PROD1PC64 with NOTICES B. Self-Regulatory Organization’s Statement on Burden on Competition Nasdaq 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. 5 15 6 15 U.S.C. 78f(b). U.S.C. 78f(b)(4). VerDate Aug<31>2005 15:22 Jan 11, 2008 Jkt 214001 C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding, or (ii) as to which Nasdaq consents, the Commission will: (A) By order approve such proposed rule change; or (B) institute proceedings to determine whether the proposed rule change should be disapproved. 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 Number SR–NASDAQ–2007–100 on the subject line. 2297 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 also will be available for inspection and copying at the principal office of Nasdaq. 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 publicly available. All submissions should refer to File Number SR–NASDAQ–2007–100 and should be submitted on or before February 4, 2008. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.7 Florence E. Harmon, Deputy Secretary. [FR Doc. E8–393 Filed 1–11–08; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–57111; File No. SR–Phlx– 2008–01] Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Expand and Permanently Adopt the $1 Strike Pilot Program January 8, 2008. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 • Send paper comments in triplicate notice is hereby given that on January 3, to Nancy M. Morris, Secretary, 2008, the Philadelphia Stock Exchange, Securities and Exchange Commission, Inc. (‘‘Phlx’’ or ‘‘Exchange’’) filed with Station Place, 100 F Street, NE., the Securities and Exchange Washington, DC 20549–1090. Commission (‘‘Commission’’) the All submissions should refer to File proposed rule change as described in Number SR–NASDAQ–2007–100. This Items I and II below, which Items have file number should be included on the subject line if e-mail is used. To help the been substantially prepared by the Exchange. Phlx filed the proposal Commission process and review your pursuant to section 19(b)(3)(A) of the comments more efficiently, please use 3 4 only one method. The Commission will Act and Rule 19b–4(f)(6) thereunder, which renders the proposal effective post all comments on the Commission’s upon filing with the Commission.5 The Internet Web site (https://www.sec.gov/ rules/sro.shtml ). Copies of the 7 17 CFR 200.30–3(a)(12). submission, all subsequent 1 15 U.S.C. 78s(b)(1). amendments, all written statements 2 17 CFR 240.19b–4. with respect to the proposed rule 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b–4(f)(6). change that are filed with the 5 The Exchange previously filed a proposed rule Commission, and all written change that was identical in all material respects to communications relating to the the instant proposal pursuant to section 19(b)(1) of proposed rule change between the the Act and Rule 19b–4 thereunder. See Securities Commission and any person, other than Exchange Act Release No. 57086 (January 2, 2008) Continued those that may be withheld from the Paper Comments PO 00000 Frm 00086 Fmt 4703 Sfmt 4703 E:\FR\FM\14JAN1.SGM 14JAN1 2298 Federal Register / Vol. 73, No. 9 / Monday, January 14, 2008 / Notices Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Commentary .05 to Phlx Rule 1012 (Series of Options Open for Trading) to expand the $1 Strike Pilot Program (‘‘$1 Pilot’’) and to request permanent approval of the $1 Pilot.6 The text of the proposed rule change is available at the Exchange, the Commission’s Public Reference Room, and https:// www.phlx.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, 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 rmajette on PROD1PC64 with NOTICES 1. Purpose The purpose of the proposed rule change is to expand the number of options classes eligible for the $1 Pilot and the range in which $1 strikes may be listed, and to request permanent approval of the $1 Pilot, thereby providing investors with greater flexibility in the trading of equity options that overlie lower priced stocks and allowing equity options positions (SR–Phlx–2007–90). Phlx subsequently withdrew such proposed rule change on January 3, 2008 and filed the instant proposal for purposes of expediting effectiveness of the proposal. See infra note 13 and accompanying text. 6 The Commission approved the $1 Pilot on June 11, 2003. See Securities Exchange Act Release No. 48013 (June 11, 2003), 68 FR 35933 (June 17, 2003) (SR–Phlx–2002–55). The $1 Pilot has subsequently been extended through June 5, 2008. See Securities Exchange Act Release Nos. 49801 (June 3, 2004), 69 FR 32652 (June 10, 2004) (SR–Phlx–2004–38) (extending the $1 Pilot until June 5, 2005); 51768 (May 31, 2005), 70 FR 33250 (June 7, 2005) (SR– Phlx–2005–35) (extending the $1 Pilot until June 5, 2006); 53938 (June 5, 2006), 71 FR 34178 (June 13, 2006) (SR–Phlx–2006–36) (extending the $1 Pilot until June 5, 2007); and 55666 (April 25, 2007), 72 FR 23879 (May 1, 2007) (SR–Phlx–2007–29) (extending the $1 Pilot until June 5, 2008). The other options exchanges have similar $1 strike price listing programs that were likewise extended through June 5, 2008. VerDate Aug<31>2005 15:22 Jan 11, 2008 Jkt 214001 that are better tailored to meet investment objectives. The $1 Pilot, under the terms set forth in Commentary .05 to Phlx Rule 1012, currently allows the Exchange to establish $1 strike price intervals on options classes overlying no more than five individual stocks designated by the Exchange where: (1) The underlying stock closes below $20 on the primary market on the trading day before selection by the Exchange; (2) the $1 strike price is from $3 to $20; (3) the $1 strike price is no more than $5 above or below the closing price of the underlying stock on the preceding day; and (4) the $1 strike price is not within $0.50 of an existing $2.50 strike price in the same series. The Exchange may not list long-term option series (‘‘LEAPS’’) at $1 strike price intervals for any class selected for the $1 Pilot. In addition, pursuant to the $1 Pilot, the Exchange may list $1 strike prices on any other option classes if those classes are specifically designated by other securities exchanges that employ a similar $1 strike price program under their respective rules. The Exchange proposes to expand the $1 Pilot to allow it to select a total of 10, instead of the current 5, individual stocks on which option series may be listed at $1 strike price intervals. Additionally, the Exchange proposes to expand the price range on which it may list $1 strikes to $3–$50, instead of the current $3–$20. The proposed expanded and permanent $1 Pilot would be known as the ‘‘$1 Strike Program.’’ The Exchange notes that the existing restrictions on listing $1 strikes would continue to apply; i.e., no $1 strike price may be listed that is greater than $5 from the underlying stock’s closing price in its primary market on the previous day or that would result in strike prices being $0.50 apart. As stated in the Commission order approving Phlx’s $1 Pilot and in the subsequent extensions of the $1 Pilot,7 the Exchange believes that $1 strike price intervals provide greater trading flexibility to investors so that they may better achieve their investment objectives. The Exchange states that its member firms representing customers have requested that Phlx seek to expand the $1 Pilot both in terms of the number of classes that can be selected by the Exchange and the range in which $1 strikes may be listed. Phlx’s last $1 Pilot report (the ‘‘Report’’) reviewed the Exchange’s positive experience with the $1 Pilot.8 7 See id. 8 See Securities Exchange Act Release No. 55666 (April 25, 2007), 72 FR 23879 (May 1, 2007) (SR– PO 00000 Frm 00087 Fmt 4703 Sfmt 4703 The Exchange states that the Report showed the strength and efficacy of the $1 Pilot on the Exchange, as reflected by the increase in the percentage of $1 strikes in comparison to total options volume traded on Phlx at $1 strike price intervals and other options volume and the continuing robust open interest of options traded on Phlx at $1 strike price intervals. With regard to the impact on systems capacities, Phlx’s analysis of the $1 Pilot showed that the impact on Phlx’s, OPRA’s, and market data vendors’ respective automated systems has been negligible. The Exchange states that, as indicated in the Report, the $1 Pilot has not created, and in the future should not create, capacity problems for the systems of OPRA. Phlx represents that it has sufficient capacity to handle an expansion of the $1 Pilot, as proposed. Finally, because the $1 Pilot has been very successful in allowing investors to establish equity options positions that are better tailored to meeting their investment objectives, Phlx requests that the $1 Pilot, as expanded, be approved on a permanent basis. 2. Statutory Basis The Exchange believes that its proposal is consistent with section 6(b) of the Act,9 in general, and furthers the objectives of section 6(b)(5), specifically,10 in that it is designed to promote just and equitable principles of trade, to perfect the mechanism of a free and open market and the national market system, and, in general, to protect investors and the public interest. The proposal should achieve this by allowing continued listing of options at $1 strike price intervals within certain parameters, thereby stimulating customer interest in options overlying the lowest tier of stocks and creating greater trading opportunities and flexibility and providing customers with the ability to more closely tailor investment strategies to the precise movement of the underlying stocks. 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. Phlx–2007–29) (enclosing the Report as Exhibit 3 to the filing). 9 15 U.S.C. 78f(b). 10 15 U.S.C. 78f(b)(5). E:\FR\FM\14JAN1.SGM 14JAN1 Federal Register / Vol. 73, No. 9 / Monday, January 14, 2008 / Notices C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange states that no written comments on the proposed rule change were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change: (1) Does not significantly affect the protection of investors or the public interest; (2) does not impose any significant burden on competition; and (3) by its terms does not become operative for 30 days after the date of this filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest, the proposed rule change 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 Rule 19b–4(f)(6) normally does not become operative for 30 days after the date of filing. However, Rule 19b– 4(f)(6)(iii) permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange requests that the Commission waive the 30-day operative delay so that the Exchange can immediately implement listing rules that are similar to those of other options exchanges.13 The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because the proposed rule change will provide the Exchange’s members and customers with added flexibility in the trading of equity options and promote, without undue delay, additional competition in the market for such options.14 The Commission expects the Exchange to continue to monitor for options with little or no open interest and trading activity and to act promptly to delist such options. In addition, the 11 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6)(iii) requires a self-regulatory organization to provide the Commission with 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 fulfilled this requirement. 13 See, e.g., Securities Exchange Act Release No. 57049 (December 27, 2007), 73 FR 528 (January 3, 2008) (SR–CBOE–2007–125). 14 For purposes only of waiving the 30-day operative delay, the Commission has also considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). rmajette on PROD1PC64 with NOTICES 12 17 VerDate Aug<31>2005 15:22 Jan 11, 2008 Jkt 214001 Commission expects that Phlx will continue to monitor the trading volume associated with the additional options series listed as a result of this proposal and the effect of these additional series on market fragmentation and on the capacity of the Exchange’s, OPRA’s, and vendors’ automated systems. For these reasons, the Commission designates the proposed rule change as operative upon filing. 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 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 Number SR–Phlx–2008–01 on the subject line. 2299 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 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–2008–01 and should be submitted on or before February 4, 2008. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.15 Florence E. Harmon, Deputy Secretary. [FR Doc. E8–350 Filed 1–11–08; 8:45 am] BILLING CODE 8011–01–P SMALL BUSINESS ADMINISTRATION Data Collection Available for Public Comments and Recommendations Notice and request for comments. ACTION: SUMMARY: In accordance with the Paperwork Reduction Act of 1995, this notice announces the Small Business Administration’s intentions to request approval on a new and/or currently approved information collection. Paper Comments DATES: Submit comments on or before March 14, 2008. • Send paper comments in triplicate ADDRESSES: Send all comments to Nancy M. Morris, Secretary, regarding whether this information Securities and Exchange Commission, collection is necessary for the proper 100 F Street, NE., Washington, DC performance of the function of the 20549–1090. agency, whether the burden estimates All submissions should refer to File are accurate, and if there are ways to Number SR–Phlx–2008–01. This file minimize the estimated burden and number should be included on the subject line if e-mail is used. To help the enhance the quality of the collection, to Jules Lichtenstein, Senior Economist, Commission process and review your Office of Advocacy, Small Business comments more efficiently, please use only one method. The Commission will Administration, 409 3rd Street, SW., 7th post all comments on the Commission’s Floor, Washington, DC 20416. FOR FURTHER INFORMATION CONTACT: Internet Web site (https://www.sec.gov/ Jules Lichtenstein, Senior Economist, rules/sro.shtml). Copies of the Office of Advocacy, 202–205–6537, submission, all subsequent jules.lichtenstein@sba.gov, or Curtis B. amendments, all written statements Rich, Management Analyst, 202–205– with respect to the proposed rule 7030, curtis.rich@sba.gov. change that are filed with the Commission, and all written SUPPLEMENTARY INFORMATION: communications relating to the Title: ‘‘High-Tech Immigrant proposed rule change between the Entrepreneurship in the U.S.’’ Commission and any person, other than Description of Respondents: Firms in those that may be withheld from the selected industries in the Dun and public in accordance with the Bradstreet database that doubled in provisions of 5 U.S.C. 552, will be revenues and employees between 2002 available for inspection and copying in and 2006. the Commission’s Public Reference 15 17 CFR 200.30–3(a)(12). Room, 100 F Street, NE., Washington, PO 00000 Frm 00088 Fmt 4703 Sfmt 4703 E:\FR\FM\14JAN1.SGM 14JAN1

Agencies

[Federal Register Volume 73, Number 9 (Monday, January 14, 2008)]
[Notices]
[Pages 2297-2299]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-350]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57111; File No. SR-Phlx-2008-01]


Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Expand and Permanently Adopt the $1 Strike Pilot Program

January 8, 2008.
    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 January 3, 2008, 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 the Exchange. 
Phlx filed the proposal pursuant to section 19(b)(3)(A) of the Act \3\ 
and Rule 19b-4(f)(6) thereunder,\4\ which renders the proposal 
effective upon filing with the Commission.\5\ The

[[Page 2298]]

Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \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).
    \5\ The Exchange previously filed a proposed rule change that 
was identical in all material respects to the instant proposal 
pursuant to section 19(b)(1) of the Act and Rule 19b-4 thereunder. 
See Securities Exchange Act Release No. 57086 (January 2, 2008) (SR-
Phlx-2007-90). Phlx subsequently withdrew such proposed rule change 
on January 3, 2008 and filed the instant proposal for purposes of 
expediting effectiveness of the proposal. See infra note 13 and 
accompanying text.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Commentary .05 to Phlx Rule 1012 
(Series of Options Open for Trading) to expand the $1 Strike Pilot 
Program (``$1 Pilot'') and to request permanent approval of the $1 
Pilot.\6\ The text of the proposed rule change is available at the 
Exchange, the Commission's Public Reference Room, and https://
www.phlx.com.
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    \6\ The Commission approved the $1 Pilot on June 11, 2003. See 
Securities Exchange Act Release No. 48013 (June 11, 2003), 68 FR 
35933 (June 17, 2003) (SR-Phlx-2002-55). The $1 Pilot has 
subsequently been extended through June 5, 2008. See Securities 
Exchange Act Release Nos. 49801 (June 3, 2004), 69 FR 32652 (June 
10, 2004) (SR-Phlx-2004-38) (extending the $1 Pilot until June 5, 
2005); 51768 (May 31, 2005), 70 FR 33250 (June 7, 2005) (SR-Phlx-
2005-35) (extending the $1 Pilot until June 5, 2006); 53938 (June 5, 
2006), 71 FR 34178 (June 13, 2006) (SR-Phlx-2006-36) (extending the 
$1 Pilot until June 5, 2007); and 55666 (April 25, 2007), 72 FR 
23879 (May 1, 2007) (SR-Phlx-2007-29) (extending the $1 Pilot until 
June 5, 2008). The other options exchanges have similar $1 strike 
price listing programs that were likewise extended through June 5, 
2008.
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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 expand the number of 
options classes eligible for the $1 Pilot and the range in which $1 
strikes may be listed, and to request permanent approval of the $1 
Pilot, thereby providing investors with greater flexibility in the 
trading of equity options that overlie lower priced stocks and allowing 
equity options positions that are better tailored to meet investment 
objectives.
    The $1 Pilot, under the terms set forth in Commentary .05 to Phlx 
Rule 1012, currently allows the Exchange to establish $1 strike price 
intervals on options classes overlying no more than five individual 
stocks designated by the Exchange where: (1) The underlying stock 
closes below $20 on the primary market on the trading day before 
selection by the Exchange; (2) the $1 strike price is from $3 to $20; 
(3) the $1 strike price is no more than $5 above or below the closing 
price of the underlying stock on the preceding day; and (4) the $1 
strike price is not within $0.50 of an existing $2.50 strike price in 
the same series. The Exchange may not list long-term option series 
(``LEAPS'') at $1 strike price intervals for any class selected for the 
$1 Pilot. In addition, pursuant to the $1 Pilot, the Exchange may list 
$1 strike prices on any other option classes if those classes are 
specifically designated by other securities exchanges that employ a 
similar $1 strike price program under their respective rules.
    The Exchange proposes to expand the $1 Pilot to allow it to select 
a total of 10, instead of the current 5, individual stocks on which 
option series may be listed at $1 strike price intervals. Additionally, 
the Exchange proposes to expand the price range on which it may list $1 
strikes to $3-$50, instead of the current $3-$20. The proposed expanded 
and permanent $1 Pilot would be known as the ``$1 Strike Program.'' The 
Exchange notes that the existing restrictions on listing $1 strikes 
would continue to apply; i.e., no $1 strike price may be listed that is 
greater than $5 from the underlying stock's closing price in its 
primary market on the previous day or that would result in strike 
prices being $0.50 apart.
    As stated in the Commission order approving Phlx's $1 Pilot and in 
the subsequent extensions of the $1 Pilot,\7\ the Exchange believes 
that $1 strike price intervals provide greater trading flexibility to 
investors so that they may better achieve their investment objectives. 
The Exchange states that its member firms representing customers have 
requested that Phlx seek to expand the $1 Pilot both in terms of the 
number of classes that can be selected by the Exchange and the range in 
which $1 strikes may be listed.
---------------------------------------------------------------------------

    \7\ See id.
---------------------------------------------------------------------------

    Phlx's last $1 Pilot report (the ``Report'') reviewed the 
Exchange's positive experience with the $1 Pilot.\8\ The Exchange 
states that the Report showed the strength and efficacy of the $1 Pilot 
on the Exchange, as reflected by the increase in the percentage of $1 
strikes in comparison to total options volume traded on Phlx at $1 
strike price intervals and other options volume and the continuing 
robust open interest of options traded on Phlx at $1 strike price 
intervals. With regard to the impact on systems capacities, Phlx's 
analysis of the $1 Pilot showed that the impact on Phlx's, OPRA's, and 
market data vendors' respective automated systems has been negligible. 
The Exchange states that, as indicated in the Report, the $1 Pilot has 
not created, and in the future should not create, capacity problems for 
the systems of OPRA. Phlx represents that it has sufficient capacity to 
handle an expansion of the $1 Pilot, as proposed.
---------------------------------------------------------------------------

    \8\ See Securities Exchange Act Release No. 55666 (April 25, 
2007), 72 FR 23879 (May 1, 2007) (SR-Phlx-2007-29) (enclosing the 
Report as Exhibit 3 to the filing).
---------------------------------------------------------------------------

    Finally, because the $1 Pilot has been very successful in allowing 
investors to establish equity options positions that are better 
tailored to meeting their investment objectives, Phlx requests that the 
$1 Pilot, as expanded, be approved on a permanent basis.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with section 
6(b) of the Act,\9\ in general, and furthers the objectives of section 
6(b)(5), specifically,\10\ in that it is designed to promote just and 
equitable principles of trade, to perfect the mechanism of a free and 
open market and the national market system, and, in general, to protect 
investors and the public interest. The proposal should achieve this by 
allowing continued listing of options at $1 strike price intervals 
within certain parameters, thereby stimulating customer interest in 
options overlying the lowest tier of stocks and creating greater 
trading opportunities and flexibility and providing customers with the 
ability to more closely tailor investment strategies to the precise 
movement of the underlying stocks.
---------------------------------------------------------------------------

    \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.

[[Page 2299]]

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

    The Exchange states that no written comments on the proposed rule 
change were either solicited or received.

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

    Because the foregoing proposed rule change: (1) Does not 
significantly affect the protection of investors or the public 
interest; (2) does not impose any significant burden on competition; 
and (3) by its terms does not become operative for 30 days after the 
date of this filing, or such shorter time as the Commission may 
designate if consistent with the protection of investors and the public 
interest, the proposed rule change has become effective pursuant to 
section 19(b)(3)(A) of the Act \11\ and Rule 19b-4(f)(6) 
thereunder.\12\
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to provide the Commission 
with 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 fulfilled this requirement.
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative for 30 days after the date of filing. However, 
Rule 19b-4(f)(6)(iii) permits the Commission to designate a shorter 
time if such action is consistent with the protection of investors and 
the public interest. The Exchange requests that the Commission waive 
the 30-day operative delay so that the Exchange can immediately 
implement listing rules that are similar to those of other options 
exchanges.\13\ The Commission believes that waiving the 30-day 
operative delay is consistent with the protection of investors and the 
public interest because the proposed rule change will provide the 
Exchange's members and customers with added flexibility in the trading 
of equity options and promote, without undue delay, additional 
competition in the market for such options.\14\ The Commission expects 
the Exchange to continue to monitor for options with little or no open 
interest and trading activity and to act promptly to delist such 
options. In addition, the Commission expects that Phlx will continue to 
monitor the trading volume associated with the additional options 
series listed as a result of this proposal and the effect of these 
additional series on market fragmentation and on the capacity of the 
Exchange's, OPRA's, and vendors' automated systems. For these reasons, 
the Commission designates the proposed rule change as operative upon 
filing.
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    \13\ See, e.g., Securities Exchange Act Release No. 57049 
(December 27, 2007), 73 FR 528 (January 3, 2008) (SR-CBOE-2007-125).
    \14\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission may summarily abrogate such rule change if it 
appears to the Commission that such action is necessary or appropriate 
in the public interest, for the protection of investors, or otherwise 
in furtherance of the 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 rule-comments@sec.gov. Please include 
File Number SR-Phlx-2008-01 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-2008-01. 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, 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 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-2008-01 and should be 
submitted on or before February 4, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
Florence E. Harmon,
Deputy Secretary.
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    \15\ 17 CFR 200.30-3(a)(12).
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[FR Doc. E8-350 Filed 1-11-08; 8:45 am]
BILLING CODE 8011-01-P
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