Self-Regulatory Organizations; American Stock Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Make Permanent Two Pilot Programs That Increase Position and Exercise Limits on Equity Options, 12479-12481 [E8-4515]
Download as PDF
<![CDATA[
Federal Register / Vol. 73, No. 46 / Friday, March 7, 2008 / Notices
Act 8 to modify the proposed access fee
or the Temporary Membership status
under Rule 3.19.02 is terminated.
Accordingly, the Exchange may further
adjust the proposed access fee in the
future if the Exchange determines that it
would be appropriate to do so taking
into consideration lease rates for
transferable CBOE memberships
prevailing at that time.
The procedural provisions of the
CBOE Fee Schedule related to the
assessment of the proposed access fee
are not proposed to be changed and will
remain the same as the current
procedural provisions regarding the
assessment of the current access fee.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
section 6(b) of the Act,9 in general, and
furthers the objectives of section 6(b)(4)
of the Act,10 in particular, in that it is
designed to provide for the equitable
allocation of reasonable dues, fees, and
other charges among persons using its
facilities.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
CBOE 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 solicited
or received with respect to the proposed
rule change.
sroberts on PROD1PC70 with NOTICES
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing rule change
establishes or changes a due, fee, or
other charge imposed by the Exchange,
it has become effective pursuant to
section 19(b)(3)(A) of the Act 11 and
subparagraph (f)(2) of Rule 19b–4 12
thereunder. 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.
8 15
U.S.C. 78s(b)(3)(A)(ii).
U.S.C. 78f(b).
10 15 U.S.C. 78f(b)(4).
11 15 U.S.C. 78s(b)(3)(A).
12 17 CFR 240.19b–4(f)(2).
9 15
VerDate Aug<31>2005
18:46 Mar 06, 2008
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–CBOE–2008–25 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.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8–4420 Filed 3–6–08; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–57415; File No. SR–Amex–
2008–16]
Self-Regulatory Organizations;
American Stock Exchange, LLC;
Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change To Make Permanent Two Pilot
Programs That Increase Position and
Exercise Limits on Equity Options
March 3, 2008.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
All submissions should refer to File
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
Number SR–CBOE–2008–25. This file
notice is hereby given that on February
number should be included on the
29, 2008, the American Stock Exchange,
subject line if e-mail is used. To help the LLC (‘‘Exchange’’ or ‘‘Amex’’) filed with
Commission process and review your
the Securities and Exchange
comments more efficiently, please use
Commission (‘‘Commission’’) the
only one method. The Commission will proposed rule change as described in
post all comments on the Commission’s Items I and II below, which Items have
Internet Web site (https://www.sec.gov/
been substantially prepared by the
rules/sro.shtml). Copies of the
Exchange. The Exchange has designated
submission, all subsequent
this proposal as non-controversial under
amendments, all written statements
Section 19(b)(3)(A)(iii) of the Act 3 and
with respect to the proposed rule
Rule 19b–4(f)(6) thereunder,4 which
change that are filed with the
renders the proposed rule change
Commission, and all written
effective upon filing with the
communications relating to the
Commission. The Commission is
proposed rule change between the
publishing this notice to solicit
Commission and any person, other than comments on the proposed rule change
those that may be withheld from the
from interested persons.
public in accordance with the
I. Self-Regulatory Organization’s
provisions of 5 U.S.C. 552, will be
Statement of the Terms of Substance of
available for inspection and copying in
the Proposed Rule Change
the Commission’s Public Reference
Room, 100 F Street, NE., Washington,
The Exchange seeks to make
DC 20549, on official business days
permanent two pilot programs that
between the hours of 10 a.m. and 3 p.m. increase standard position and exercise
Copies of such filing also will be
limits for equity option classes traded
available for inspection and copying at
on the Exchange. The text of the
the principal office of the Exchange. All proposed rule change is available on the
comments received will be posted
Exchange’s Web site (https://
without change; the Commission does
www.amex.com), at the Exchange’s
not edit personal identifying
principal office, and at the
information from submissions. You
Commission’s Public Reference Room.
should submit only information that
you wish to make available publicly. All
13 17 CFR 200.30–3(a)(12).
submissions should refer to File No.
1 15 U.S.C. 78s(b)(1).
SR–CBOE–2008–25 and should be
2 17 CFR 240.19b–4.
submitted on or before March 28, 2008.
3 15
4 17
Jkt 214001
12479
PO 00000
Frm 00113
Fmt 4703
Sfmt 4703
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
E:\FR\FM\07MRN1.SGM
07MRN1
12480
Federal Register / Vol. 73, No. 46 / Friday, March 7, 2008 / Notices
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of, and basis for,
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item 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
sroberts on PROD1PC70 with NOTICES
The Exchange is seeking to make
permanent two pilot programs that
increase position and exercise limits for
equity options. The Exchange proposes
to amend Rule 904 to permanently
establish the increased limits of the two
pilot programs.
The first pilot program (‘‘Rule 904
Pilot Program’’), which commenced in
March 2005 5 and was adopted by all the
options exchanges, increased position
and exercise limits for options on the
QQQQ and equity options classes traded
on the Exchange.
The second pilot program, which
commenced in January 2007, increased
the position and exercise limits for
options on the iShares Russell 2000
Index Fund (‘‘IWM’’) (‘‘IWM Option
Pilot Program’’) from 250,000 contracts
to 500,000 contracts.6
5 See Securities Exchange Act Release No. 51316
(March 3, 2005); 70 FR 12251 (March 11, 2005)
(notice of filing and immediate effectiveness of File
No. SR–Amex 2005–029). The Pilot Program was
extended five times and is due to expire on March
1, 2008. See Securities Exchange Act Release Nos.
56262 (August 15, 2007), 72 FR 47089 (August 22,
2007) (SR–Amex–2007–86); 55226 (February 1,
2007), 72 FR 6300 (February 9, 2007) (SR–Amex–
2007–15); 54386 (August 30, 2006), 71 FR 52831
(September 7, 2006) (SR–Amex–2006–75); 53349
(February 22, 2006), 71 FR 10571 (March 1, 2006)
(SR–Amex–2006–07); and 52260 (August 15, 2005),
70 FR 48991 (August 22, 2005) (SR–Amex–2005–
082).
6 The IWM Option Pilot Program doubles the
position and exercise limits for IWM options under
the Rule 904 Pilot Program. See Rule 904,
Commentary .07. Absent both of these pilot
programs, the standard position and exercise limit
for IWM options is 75,000 option contracts. The
proposal that established the IWM Option Pilot
Program was effective upon filing. See Securities
Exchange Act Release No. 55163 (January 24, 2007),
72 FR 4547 (January 31, 2007) (SR–Amex–2007–11).
The IWM Option Pilot Program has been extended
twice by the Commission, and expires on March 1,
2008. See Securities Exchange Act Release Nos.
57145 (January 14, 2008), 73 FR 3760 (January 22,
VerDate Aug<31>2005
18:46 Mar 06, 2008
Jkt 214001
The standard position limits were last
increased nine years ago, on December
31, 1998.7 Since that time, there has
been a steady increase in the number of
accounts that (a) approach the position
limit; (b) exceed the position limit; and
(c) are granted an exemption to the
standard limit.
The Exchange has not encountered
any problems or difficulties relating to
the two pilot programs since their
inception. To the best of the Exchange’s
knowledge, any violations of position or
exercise limits under the pilot programs
were immaterial. None of the violations
were deemed to be the result of
manipulative activities. The Exchange
believes that the increase in options
volume and lack of evidence of market
manipulation since the last position
limits increase, and throughout the
duration of the two pilot programs,
justifies making permanent the Rule 904
Pilot Program and IWM Option Pilot
Program.
Furthermore, as the anniversary of
listed options trading approaches its
35th year, the Exchange believes that
the existing surveillance procedures and
options positions reporting
requirements at the Amex, at other
options exchanges, and at the several
clearing firms are capable of properly
identifying unusual or illegal trading
activity. The Exchange’s procedures
include daily monitoring of market
movements via automated surveillance
techniques to identify unusual activities
in both options and their underlying
securities.
Accordingly, the Exchange represents
that its surveillance procedures and
reporting procedures, in conjunction
with the financial requirements and risk
management review procedures already
in place at the clearing firms and the
Options Clearing Corporation, will serve
to adequately address any concerns the
Commission may have with respect to
account(s) engaging in any manipulative
schemes or assuming too high a level of
risk exposure.
Moreover, the Exchange believes that
the current financial requirements
imposed by the Exchange and the
Commission adequately address the
concerns that a member or its customer
may try to maintain an inordinately
large unhedged position in an equity
option.
Finally, the Exchange expects
continued options volume growth as
2008) (SR–Amex–2008–01); and 56090 (July 18,
2007), 72 FR 40907 (July 25, 2007) (SR–Amex–
2007–73).
7 See Securities Exchange Act Release No. 40875
(December 31, 1998), 64 FR 1842 (January 12, 1999)
(SR–Amex–98–22) (approving an increase in
position limits and exercise limits).
PO 00000
Frm 00114
Fmt 4703
Sfmt 4703
opportunities for investors to participate
in the options markets increase and
evolve. The Exchange believes that the
non-pilot position and exercise limits
are restrictive, and returning to those
limits will hamper fair and effective
competition between the listed options
markets and the over-the-counter
markets. To date, there have been no
adverse affects on the markets as a result
of the past increases in the limits for
equity options contracts.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6 of the Act 8 in general and
furthers the objectives of Section
6(b)(5) 9 in particular in that it is
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to foster cooperation and
coordination with persons engaged in
facilitating transactions in securities,
and to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange believes that the
proposed rule change will impose no
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 solicited
or received by the Exchange on this
proposal.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange has designated the
proposed rule change as one that: (1)
Does not significantly affect the
protection of investors or the public
interest; (2) does not impose any
significant burden on competition; and
(3) does not become operative for 30
days from the date of filing, or such
shorter time as the Commission may
designate if consistent with the
protection of investors and the public
interest. Therefore, the foregoing rule
change has become effective pursuant to
Section 19(b)(3)(A) of the Act 10 and
subparagraph (f)(6) of Rule 19b–4
8 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
10 15 U.S.C. 78s(b)(3)(A).
9 15
E:\FR\FM\07MRN1.SGM
07MRN1
Federal Register / Vol. 73, No. 46 / Friday, March 7, 2008 / Notices
thereunder.11 The Exchange notes that
the proposed rule change is based on a
similar proposal recently approved by
the Commission.12 The Exchange has
asked the Commission to waive the
operative delay to permit the proposed
rule change to become operative prior to
the 30th day after filing.
The Rule 904 Pilot Program and the
IWM Option Pilot Program were
scheduled to expire on March 1, 2008.
The Commission believes that waiving
the 30-day operative delay of the
Exchange’s proposal is consistent with
the protection of investors and the
public interest because it will allow the
position and exercise limits to remain at
consistent levels during the transition
from the pilot programs to permanent
status.13 Therefore, the Commission
designates the proposal to be operative
upon filing.
At any time within 60 days of the
filing of the proposed rule change, the
Commission may summarily abrogate
the rule change if it appears to the
Commission that such action is
necessary or appropriate in the public
interest, for the protection of investors,
or otherwise in furtherance of the
purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
No. SR–Amex–2008–16 on the subject
line.
Paper Comments
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
Securities and Exchange Commission,
sroberts on PROD1PC70 with NOTICES
11 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.
12 See Securities Exchange Act Release No. 57352
(February 19, 2008), 73 FR 10076 (February 25,
2008) (order granting accelerated approval to SR–
CBOE–2008–07).
13 For 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).
VerDate Aug<31>2005
18:46 Mar 06, 2008
Jkt 214001
100 F Street, NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–Amex–2008–16. 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 such filings 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–Amex–2008–16 and should
be submitted on or before March 28,
2008.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8–4515 Filed 3–6–08; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–57414; File No. SR–BSE–
2008–12]
Self-Regulatory Organizations; Boston
Stock Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of
Proposed Rule Change To Make
Permanent Two Pilot Programs That
Increase Position and Exercise Limits
on Equity Options
March 3, 2008.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
14 17
PO 00000
CFR 200.30–3(a)(12).
Frm 00115
Fmt 4703
Sfmt 4703
12481
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on February
29, 2008, the Boston Stock Exchange,
Inc. (‘‘Exchange’’ or ‘‘BSE’’) 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. The Exchange has designated
this proposal as non-controversial under
Section 19(b)(3)(A)(iii) of the Act 3 and
Rule 19b–4(f)(6) thereunder,4 which
renders the proposed rule change
effective upon filing with the
Commission. The 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 the
Rules of the Boston Options Exchange
(‘‘BOX’’). The Exchange is proposing to
make permanent the position and
exercise limits that the Exchange is
currently applying to equity options on
a pilot basis. The text of the rule
proposal is available on the Exchange’s
Web site (https://www.bostonstock.com),
at the offices of the Exchange, and at the
Commission’s Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of, and basis for,
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item 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 make permanent two pilot
programs that increase position and
exercise limits for equity options. To
permanently establish the two pilot
programs, the Exchange proposes to
amend Section 7 (Position Limits) and
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b–4(f)(6).
2 17
E:\FR\FM\07MRN1.SGM
07MRN1
]]>Agencies
[Federal Register Volume 73, Number 46 (Friday, March 7, 2008)]
[Notices]
[Pages 12479-12481]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-4515]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-57415; File No. SR-Amex-2008-16]
Self-Regulatory Organizations; American Stock Exchange, LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Make Permanent Two Pilot Programs That Increase Position and Exercise
Limits on Equity Options
March 3, 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 February 29, 2008, the American Stock Exchange, LLC (``Exchange'' or
``Amex'') 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.
The Exchange has designated this proposal as non-controversial under
Section 19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6)
thereunder,\4\ which renders the proposed rule change 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)(iii).
\4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange seeks to make permanent two pilot programs that
increase standard position and exercise limits for equity option
classes traded on the Exchange. The text of the proposed rule change is
available on the Exchange's Web site (https://www.amex.com), at the
Exchange's principal office, and at the Commission's Public Reference
Room.
[[Page 12480]]
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of, and basis for, the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item 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 Exchange is seeking to make permanent two pilot programs that
increase position and exercise limits for equity options. The Exchange
proposes to amend Rule 904 to permanently establish the increased
limits of the two pilot programs.
The first pilot program (``Rule 904 Pilot Program''), which
commenced in March 2005 \5\ and was adopted by all the options
exchanges, increased position and exercise limits for options on the
QQQQ and equity options classes traded on the Exchange.
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 51316 (March 3,
2005); 70 FR 12251 (March 11, 2005) (notice of filing and immediate
effectiveness of File No. SR-Amex 2005-029). The Pilot Program was
extended five times and is due to expire on March 1, 2008. See
Securities Exchange Act Release Nos. 56262 (August 15, 2007), 72 FR
47089 (August 22, 2007) (SR-Amex-2007-86); 55226 (February 1, 2007),
72 FR 6300 (February 9, 2007) (SR-Amex-2007-15); 54386 (August 30,
2006), 71 FR 52831 (September 7, 2006) (SR-Amex-2006-75); 53349
(February 22, 2006), 71 FR 10571 (March 1, 2006) (SR-Amex-2006-07);
and 52260 (August 15, 2005), 70 FR 48991 (August 22, 2005) (SR-Amex-
2005-082).
---------------------------------------------------------------------------
The second pilot program, which commenced in January 2007,
increased the position and exercise limits for options on the
iShares[supreg] Russell 2000[supreg] Index Fund (``IWM'') (``IWM Option
Pilot Program'') from 250,000 contracts to 500,000 contracts.\6\
---------------------------------------------------------------------------
\6\ The IWM Option Pilot Program doubles the position and
exercise limits for IWM options under the Rule 904 Pilot Program.
See Rule 904, Commentary .07. Absent both of these pilot programs,
the standard position and exercise limit for IWM options is 75,000
option contracts. The proposal that established the IWM Option Pilot
Program was effective upon filing. See Securities Exchange Act
Release No. 55163 (January 24, 2007), 72 FR 4547 (January 31, 2007)
(SR-Amex-2007-11). The IWM Option Pilot Program has been extended
twice by the Commission, and expires on March 1, 2008. See
Securities Exchange Act Release Nos. 57145 (January 14, 2008), 73 FR
3760 (January 22, 2008) (SR-Amex-2008-01); and 56090 (July 18,
2007), 72 FR 40907 (July 25, 2007) (SR-Amex-2007-73).
---------------------------------------------------------------------------
The standard position limits were last increased nine years ago, on
December 31, 1998.\7\ Since that time, there has been a steady increase
in the number of accounts that (a) approach the position limit; (b)
exceed the position limit; and (c) are granted an exemption to the
standard limit.
---------------------------------------------------------------------------
\7\ See Securities Exchange Act Release No. 40875 (December 31,
1998), 64 FR 1842 (January 12, 1999) (SR-Amex-98-22) (approving an
increase in position limits and exercise limits).
---------------------------------------------------------------------------
The Exchange has not encountered any problems or difficulties
relating to the two pilot programs since their inception. To the best
of the Exchange's knowledge, any violations of position or exercise
limits under the pilot programs were immaterial. None of the violations
were deemed to be the result of manipulative activities. The Exchange
believes that the increase in options volume and lack of evidence of
market manipulation since the last position limits increase, and
throughout the duration of the two pilot programs, justifies making
permanent the Rule 904 Pilot Program and IWM Option Pilot Program.
Furthermore, as the anniversary of listed options trading
approaches its 35th year, the Exchange believes that the existing
surveillance procedures and options positions reporting requirements at
the Amex, at other options exchanges, and at the several clearing firms
are capable of properly identifying unusual or illegal trading
activity. The Exchange's procedures include daily monitoring of market
movements via automated surveillance techniques to identify unusual
activities in both options and their underlying securities.
Accordingly, the Exchange represents that its surveillance
procedures and reporting procedures, in conjunction with the financial
requirements and risk management review procedures already in place at
the clearing firms and the Options Clearing Corporation, will serve to
adequately address any concerns the Commission may have with respect to
account(s) engaging in any manipulative schemes or assuming too high a
level of risk exposure.
Moreover, the Exchange believes that the current financial
requirements imposed by the Exchange and the Commission adequately
address the concerns that a member or its customer may try to maintain
an inordinately large unhedged position in an equity option.
Finally, the Exchange expects continued options volume growth as
opportunities for investors to participate in the options markets
increase and evolve. The Exchange believes that the non-pilot position
and exercise limits are restrictive, and returning to those limits will
hamper fair and effective competition between the listed options
markets and the over-the-counter markets. To date, there have been no
adverse affects on the markets as a result of the past increases in the
limits for equity options contracts.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6 of the Act \8\ in general and furthers the objectives of
Section 6(b)(5) \9\ in particular in that it is designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, to foster cooperation and coordination
with persons engaged in facilitating transactions in securities, and to
remove impediments to and perfect the mechanism of a free and open
market and a national market system.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange believes that the proposed rule change will impose no
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 solicited or received by the Exchange on
this proposal.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has designated the proposed rule change as one that:
(1) Does not significantly affect the protection of investors or the
public interest; (2) does not impose any significant burden on
competition; and (3) does not become operative for 30 days from the
date of filing, or such shorter time as the Commission may designate if
consistent with the protection of investors and the public interest.
Therefore, the foregoing rule change has become effective pursuant to
Section 19(b)(3)(A) of the Act \10\ and subparagraph (f)(6) of Rule
19b-4
[[Page 12481]]
thereunder.\11\ The Exchange notes that the proposed rule change is
based on a similar proposal recently approved by the Commission.\12\
The Exchange has asked the Commission to waive the operative delay to
permit the proposed rule change to become operative prior to the 30th
day after filing.
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 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.
\12\ See Securities Exchange Act Release No. 57352 (February 19,
2008), 73 FR 10076 (February 25, 2008) (order granting accelerated
approval to SR-CBOE-2008-07).
---------------------------------------------------------------------------
The Rule 904 Pilot Program and the IWM Option Pilot Program were
scheduled to expire on March 1, 2008. The Commission believes that
waiving the 30-day operative delay of the Exchange's proposal is
consistent with the protection of investors and the public interest
because it will allow the position and exercise limits to remain at
consistent levels during the transition from the pilot programs to
permanent status.\13\ Therefore, the Commission designates the proposal
to be operative upon filing.
---------------------------------------------------------------------------
\13\ For 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).
---------------------------------------------------------------------------
At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate the rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File No. SR-Amex-2008-16 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-Amex-2008-16. 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 such filings 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-Amex-2008-16 and should be
submitted on or before March 28, 2008.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
---------------------------------------------------------------------------
\14\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-4515 Filed 3-6-08; 8:45 am]
BILLING CODE 8011-01-P
