Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the Quarterly Options Series Pilot Program, 39741-39743 [E8-15636]
Download as PDF
<![CDATA[
jlentini on PROD1PC65 with NOTICES
Federal Register / Vol. 73, No. 133 / Thursday, July 10, 2008 / Notices
rule (i) requires that records produced
pursuant to the fingerprinting
requirements of Section 17(f)(2) of the
Securities Exchange Act of 1934
(‘‘Exchange Act’’) be maintained, (ii)
permits the designated examining
authorities of broker-dealers or members
of exchanges, under certain
circumstances, to store and maintain
records required to be kept by this rule,
and (iii) permits the required records to
be maintained on microfilm.
The general purpose for Rule 17f–2 is:
(i) To identify security risk personnel;
(ii) to provide criminal record
information so that employers can make
fully informed employment decisions;
and (iii) to deter persons with criminal
records from seeking employment or
association with covered entities.
Retention of fingerprint records, as
required under paragraph (d) of the
Rule, enables the Commission or other
examining authority to ascertain
whether all required persons are being
fingerprinted and whether proper
procedures regarding fingerprints are
being followed. Retention of these
records for the term of employment of
all personnel plus three years ensures
that law enforcement officials will have
easy access to fingerprint cards on a
timely basis. This in turn acts as an
effective deterrent to employee
misconduct.
Approximately 5,984 respondents are
subject to the recordkeeping
requirements of the rule. Each
respondent keeps approximately 62 new
records per year, which takes
approximately 2 minutes per record for
the respondent to maintain, for an
annual burden of approximately 2 hours
per respondent or a total annual burden
of approximately 11,968 hours on all
respondents, collectively. All records
subject to the rule must be retained for
the term of employment plus 3 years.
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
unless it displays a currently valid
control number. Written comments are
invited on: (a) Whether the proposed
collection of information is necessary
for the proper performance of the
functions of the agency, including
whether the information will have
practical utility; (b) the accuracy of the
agency’s estimate of the burden of the
collection of information; (c) ways to
enhance the quality, utility, and clarity
of the information collected; and (d)
ways to minimize the burden of the
collection of information on
respondents, including through the use
of automated collection techniques or
other forms of information technology.
Consideration will be given to
VerDate Aug<31>2005
16:58 Jul 09, 2008
Jkt 214001
comments and suggestions submitted in
writing within 60 days of this
publication.
Please direct your written comments
to Lewis W. Walker, Acting Director/
Chief Information Officer, Securities
and Exchange Commission, c/o Shirley
Martinson, 6432 General Green Way,
Alexandria, Virginia, 22312; or send an
e-mail to: PRA_Mailbox@sec.gov.
Dated: July 7, 2008.
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8–15683 Filed 7–9–08; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–58083; File No. SR–Amex–
2008–57]
Self-Regulatory Organizations;
American Stock Exchange LLC; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change To Extend
the Quarterly Options Series Pilot
Program
July 2, 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 June 27,
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.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to extend for
one year, through July 10, 2009, its pilot
program allowing the listing and trading
of options series that expire at the close
of business on the last business day of
a calendar quarter (the ‘‘Pilot Program’’).
The text of the proposed rule change is
available on the Exchange’s Web site
(https://www.amex.com), at the principal
PO 00000
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
Frm 00096
Fmt 4703
Sfmt 4703
39741
office 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 Exchange is proposing to extend
the Pilot Program from July 10, 2008,
through and including July 10, 2009.
The Pilot Program was originally
approved by the Commission in July
2006,5 and subsequently extended in
July 2007.6 The Pilot Program permits
the Amex to accommodate the listing
and trading of options series that expire
at the close of business on the last
business day of a calendar quarter
(‘‘Quarterly Options Series’’). The
Exchange as well as the other options
exchanges recently amended the Pilot
Program to permit the listing of
additional Quarterly Options Series
relating to exchange-traded fund
(‘‘ETF’’) shares.7
The Exchange submits that Quarterly
Options Series are beneficial to the
marketplace and provide investors an
additional risk management tool. Amex
Rules 900(b)(45) and 900C(c)(26) define
‘‘Quarterly Options Series’’ as a series of
an options class or an index options
class, respectively, that is approved for
listing and trading on the Exchange in
which the series is opened for trading
on any business day and that expires at
the close of business on the last
business day of a calendar quarter.
Quarterly Options Series are limited to
5 See Securities Exchange Act Release No. 54137
(July 12, 2006), 71 FR 41283 (July 20, 2006) (SR–
Amex–2006–67).
6 See Securities Exchange Act Release No. 56032
(July 9, 2007), 72 FR 38634 (July 13, 2007) (SR–
Amex–2007–66).
7 See Securities Exchange Act Release No. 57581
(March 31, 2008), 73 FR 18593 (April 4, 2008) (SR–
Amex–2008–31) (‘‘Pilot Expansion’’). The Pilot
Expansion permits the listing of additional series
and establishes a delisting policy for outlying series
with no open interest.
E:\FR\FM\10JYN1.SGM
10JYN1
39742
Federal Register / Vol. 73, No. 133 / Thursday, July 10, 2008 / Notices
jlentini on PROD1PC65 with NOTICES
options classes that are either stock
index options or options on ETF shares
and can be opened on a business day
(‘‘Quarterly Options Opening Date’’).
Commentary .09 to Amex Rule 903 and
Amex Rule 903C(a)(iv) set forth the
requirements for listing such options on
the Exchange. Specifically, the
Exchange lists series that expire at the
end of the next four consecutive
calendar quarters, as well as the fourth
quarter of the next calendar year.
The Exchange has submitted a report
(‘‘Report’’) providing data regarding the
Pilot Program as required in the original
approval of the Pilot Program 8 as
amended by the Pilot Expansion.9
Under the terms of the Pilot Program,
the Exchange selected (5) option classes
on which Quarterly Options Series may
be opened on any Quarterly Options
Opening Date. Also under the terms of
the Pilot Program, the Exchange may list
those Quarterly Options Series on any
option class that is selected by another
securities exchange with a similar Pilot
Program under its rules.
As noted in the Report, the Exchange
has not selected any additional ETF or
stock index options for the Pilot at this
time. As the data in the Report indicate,
the Amex volume trends in Quarterly
Options Series as compared to all
options in the Pilot securities show
higher utilization rates throughout the
year. Specifically, an examination of
monthly volume in Quarterly Options
Series as compared to all options in the
Pilot Program securities shows a
monthly average of 7.5% or 335,383
contracts per month. Notable are the
higher utilization rates seen in the
calendar quarters of December 2007 and
May 2008 that were 12.94% and
21.53%, respectively. The Exchange
believes that the December 2007 figures
demonstrate that Quarterly Options
Series increasingly are used by
participants looking to hedge exposures
through the end of a given calendar
quarter. With respect to the large
increase in utilization of Quarterly
Options Series during May 2008, the
data indicate that the primary reason is
due to trading in Select Energy SPDR
options (XLE). The Exchange submits
that based on greater volatility and price
increases in recent months in the energy
commodities sectors, XLE has
concurrently shown increased interest
and trading by investors.
In connection with open interest, the
Report reveals that, on average,
Quarterly Options Series account for
15% of total open interest in Pilot
Program securities. The open interest in
Quarterly Options Series has generally
trended higher during the time period
evaluated. The December 2007 and
March 2008 open interest in Quarterly
Options Series were markedly higher, at
18.2% and 18.1% of total options open
interest, respectively.
Accordingly, the Exchange believes
that an extension of the Pilot Program
for one year, through July 10, 2009, is
warranted in order to satisfy the
institutional demand for such options
and provide additional flexibility as
well as an additional risk management
tool to investors.
The Exchange notes that it possesses
the adequate systems capacity to
support the trading of Quarterly Options
Series.
8 The Report submitted to the Commission is
required to include, at a minimum: (1) Data and
written analysis on the open interest and trading
volume in the classes for which Quarterly Options
Series were opened; (2) an assessment of the
appropriateness of the option classes selected for
the Pilot Program; (3) an assessment of the impact
of the Pilot Program on the capacity on the Amex,
OPRA and on market data vendors (to the extent
data from market data vendors is available); (4) any
capacity problems or other problems that arose
during the operation of the Pilot Program and how
the Amex addressed such problems; (5) any
complaints that the Amex received during the
operation of the Pilot Program and how the Amex
addressed them; and (6) any additional information
that would assist the Commission in assessing the
operation of the Pilot Program.
9 In connection with the Pilot Expansion (see
supra note 7), the Commission required that the
Report also include an analysis of (1) the impact of
the additional series on the Exchange’s market and
quote capacity, and (2) the implementation and
effects of the delisting policy, including the number
of series eligible for delisting during the period
covered by the report, the number of series actually
de-listed during that period (pursuant to the
delisting policy or otherwise), and documentation
of any customer requests to maintain Quarterly
Options Series strikes that were otherwise eligible
for delisting.
2. Statutory Basis
VerDate Aug<31>2005
16:58 Jul 09, 2008
Jkt 214001
The Exchange believes that the
proposed rule change is consistent with
Section 6 of Act 10 in general and
furthers the objectives of Section 6(b)(5)
of the Act 11 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 and, in general, to protect
investors and the public interest. The
Exchange further believes that an
extension of the Quarterly Options
Series Pilot Program will benefit the
marketplace and continue to provide
PO 00000
10 15
11 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
Frm 00097
Fmt 4703
Sfmt 4703
investors additional risk management
tools.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange believes that the
proposed rule change does not 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.
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 12 and
subparagraph (f)(6) of Rule 19b–4
thereunder.13
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 Commission
has determined that waiving the 30-day
operative delay of the Exchange’s
proposal is consistent with the
protection of investors and the public
interest and will promote competition
because such waiver will allow the
Exchange to continue the existing
Quarterly Options Series Pilot Program
without interruption.14 Therefore, the
Commission designates the proposal
operative upon filing.
At any time within 60 days of the
filing of the proposed rule change, the
12 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.
14 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).
13 17
E:\FR\FM\10JYN1.SGM
10JYN1
Federal Register / Vol. 73, No. 133 / Thursday, July 10, 2008 / Notices
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–2008–57 on the subject
line.
SR–Amex–2008–57 and should be
submitted on or before July 31, 2008.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8–15636 Filed 7–9–08; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–58084; File No. SR–Amex–
2008–55]
Self-Regulatory Organizations;
American Stock Exchange LLC; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change To Extend
the Short Term Option Series Pilot
Program
July 2, 2008.
Paper Comments
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 June 27,
2008, the American Stock Exchange LLC
(‘‘Amex’’ or ‘‘Exchange’’) filed with the
All submissions should refer to File
Securities and Exchange Commission
Number SR–Amex–2008–57. This file
(‘‘Commission’’) the proposed rule
number should be included on the
change as described in Items I and II
subject line if e-mail is used. To help the
below, which Items have been
Commission process and review your
substantially prepared by the Exchange.
comments more efficiently, please use
only one method. The Commission will The Exchange has designated this
post all comments on the Commission’s proposal as non-controversial under
Section 19(b)(3)(A)(iii) of the Act 3 and
Internet Web site (https://www.sec.gov/
Rule 19b–4(f)(6) thereunder,4 which
rules/sro.shtml). Copies of the
renders the proposed rule change
submission, all subsequent
effective upon filing with the
amendments, all written statements
Commission. The Commission is
with respect to the proposed rule
publishing this notice to solicit
change that are filed with the
comments on the proposed rule change
Commission, and all written
from interested persons.
communications relating to the
proposed rule change between the
I. Self-Regulatory Organization’s
Commission and any person, other than
Statement of the Terms of Substance of
those that may be withheld from the
the Proposed Rule Change
public in accordance with the
provisions of 5 U.S.C. 552, will be
The Exchange proposes to extend the
available for inspection and copying in
period for its Short Term Option Series
the Commission’s Public Reference
pilot program (the ‘‘Pilot Program’’) for
Room, 100 F Street, NE., Washington,
an additional year, through July 12,
DC 20549, on official business days
2009. The text of the proposed rule
between the hours of 10 a.m. and 3 p.m. change is available on the Exchange’s
Copies of such filing also will be
Web site (https://www.amex.com), at the
available for inspection and copying at
principal office of the Exchange, and at
the principal office of the Exchange. All
the Commission’s Public Reference
comments received will be posted
Room.
without change; the Commission does
not edit personal identifying
15 17 CFR 200.30–3(a)(12).
information from submissions. You
1 15 U.S.C. 78s(b)(1).
should submit only information that
2 17 CFR 240.19b–4.
you wish to make available publicly. All
3 15 U.S.C. 78s(b)(3)(A)(iii).
submissions should refer to File No.
4 17 CFR 240.19b–4(f)(6).
jlentini on PROD1PC65 with NOTICES
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street, NE.,
Washington, DC 20549–1090.
VerDate Aug<31>2005
16:58 Jul 09, 2008
Jkt 214001
PO 00000
Frm 00098
Fmt 4703
Sfmt 4703
39743
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
On July 12, 2005, the Commission
initially approved the Pilot Program.5
On July 11, 2007, the Pilot Program was
extended through July 12, 2008.6 The
Exchange now proposes to extend the
Pilot Program for an additional year,
through July 12, 2009. The Pilot
Program allows the Amex to list and
trade options series that expire one
week after the date on which the series
is opened (‘‘Short Term Option Series’’).
The Exchange believes that Short
Term Option Series may provide
investors with a flexible and valuable
tool to manage risk exposure, minimize
capital outlays, and be more responsive
to the timing of events affecting the
securities that underlie option contracts.
At the same time, however, the
Exchange is cognizant of the need to be
cautious in introducing a product that
can increase the number of outstanding
strike prices.
In its original proposal to establish the
Pilot Program, the Exchange stated that
if it were to propose an extension of the
program, the Amex would submit a
Pilot Program report (‘‘Report’’) that
would provide analysis of the Pilot
Program covering the entire period
during which the Pilot Program was in
effect. Because the Exchange has yet to
list any Short Term Option Series
during the Pilot Program, there is no
data available to prepare the Report at
this time, and accordingly, the Exchange
has not submitted a Report with this
proposal to extend the Pilot Program.
The Exchange notes that it possesses
the adequate systems capacity to trade
5 See Securities Exchange Act Release No. 52014
(July 12, 2005), 70 FR 41244 (July 18, 2005) (SR–
Amex–2005–035).
6 See Securities Exchange Act Release No. 56046
(July 11, 2007), 72 FR 39105 (July 17, 2007) (SR–
Amex–2007–62).
E:\FR\FM\10JYN1.SGM
10JYN1
]]>Agencies
[Federal Register Volume 73, Number 133 (Thursday, July 10, 2008)]
[Notices]
[Pages 39741-39743]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-15636]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-58083; File No. SR-Amex-2008-57]
Self-Regulatory Organizations; American Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Extend the Quarterly Options Series Pilot Program
July 2, 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 June 27, 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 proposes to extend for one year, through July 10,
2009, its pilot program allowing the listing and trading of options
series that expire at the close of business on the last business day of
a calendar quarter (the ``Pilot Program''). The text of the proposed
rule change is available on the Exchange's Web site (https://
www.amex.com), at the principal office 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 Exchange is proposing to extend the Pilot Program from July 10,
2008, through and including July 10, 2009.
The Pilot Program was originally approved by the Commission in July
2006,\5\ and subsequently extended in July 2007.\6\ The Pilot Program
permits the Amex to accommodate the listing and trading of options
series that expire at the close of business on the last business day of
a calendar quarter (``Quarterly Options Series''). The Exchange as well
as the other options exchanges recently amended the Pilot Program to
permit the listing of additional Quarterly Options Series relating to
exchange-traded fund (``ETF'') shares.\7\
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 54137 (July 12,
2006), 71 FR 41283 (July 20, 2006) (SR-Amex-2006-67).
\6\ See Securities Exchange Act Release No. 56032 (July 9,
2007), 72 FR 38634 (July 13, 2007) (SR-Amex-2007-66).
\7\ See Securities Exchange Act Release No. 57581 (March 31,
2008), 73 FR 18593 (April 4, 2008) (SR-Amex-2008-31) (``Pilot
Expansion''). The Pilot Expansion permits the listing of additional
series and establishes a delisting policy for outlying series with
no open interest.
---------------------------------------------------------------------------
The Exchange submits that Quarterly Options Series are beneficial
to the marketplace and provide investors an additional risk management
tool. Amex Rules 900(b)(45) and 900C(c)(26) define ``Quarterly Options
Series'' as a series of an options class or an index options class,
respectively, that is approved for listing and trading on the Exchange
in which the series is opened for trading on any business day and that
expires at the close of business on the last business day of a calendar
quarter. Quarterly Options Series are limited to
[[Page 39742]]
options classes that are either stock index options or options on ETF
shares and can be opened on a business day (``Quarterly Options Opening
Date''). Commentary .09 to Amex Rule 903 and Amex Rule 903C(a)(iv) set
forth the requirements for listing such options on the Exchange.
Specifically, the Exchange lists series that expire at the end of the
next four consecutive calendar quarters, as well as the fourth quarter
of the next calendar year.
The Exchange has submitted a report (``Report'') providing data
regarding the Pilot Program as required in the original approval of the
Pilot Program \8\ as amended by the Pilot Expansion.\9\ Under the terms
of the Pilot Program, the Exchange selected (5) option classes on which
Quarterly Options Series may be opened on any Quarterly Options Opening
Date. Also under the terms of the Pilot Program, the Exchange may list
those Quarterly Options Series on any option class that is selected by
another securities exchange with a similar Pilot Program under its
rules.
---------------------------------------------------------------------------
\8\ The Report submitted to the Commission is required to
include, at a minimum: (1) Data and written analysis on the open
interest and trading volume in the classes for which Quarterly
Options Series were opened; (2) an assessment of the appropriateness
of the option classes selected for the Pilot Program; (3) an
assessment of the impact of the Pilot Program on the capacity on the
Amex, OPRA and on market data vendors (to the extent data from
market data vendors is available); (4) any capacity problems or
other problems that arose during the operation of the Pilot Program
and how the Amex addressed such problems; (5) any complaints that
the Amex received during the operation of the Pilot Program and how
the Amex addressed them; and (6) any additional information that
would assist the Commission in assessing the operation of the Pilot
Program.
\9\ In connection with the Pilot Expansion (see supra note 7),
the Commission required that the Report also include an analysis of
(1) the impact of the additional series on the Exchange's market and
quote capacity, and (2) the implementation and effects of the
delisting policy, including the number of series eligible for
delisting during the period covered by the report, the number of
series actually de-listed during that period (pursuant to the
delisting policy or otherwise), and documentation of any customer
requests to maintain Quarterly Options Series strikes that were
otherwise eligible for delisting.
---------------------------------------------------------------------------
As noted in the Report, the Exchange has not selected any
additional ETF or stock index options for the Pilot at this time. As
the data in the Report indicate, the Amex volume trends in Quarterly
Options Series as compared to all options in the Pilot securities show
higher utilization rates throughout the year. Specifically, an
examination of monthly volume in Quarterly Options Series as compared
to all options in the Pilot Program securities shows a monthly average
of 7.5% or 335,383 contracts per month. Notable are the higher
utilization rates seen in the calendar quarters of December 2007 and
May 2008 that were 12.94% and 21.53%, respectively. The Exchange
believes that the December 2007 figures demonstrate that Quarterly
Options Series increasingly are used by participants looking to hedge
exposures through the end of a given calendar quarter. With respect to
the large increase in utilization of Quarterly Options Series during
May 2008, the data indicate that the primary reason is due to trading
in Select Energy SPDR options (XLE). The Exchange submits that based on
greater volatility and price increases in recent months in the energy
commodities sectors, XLE has concurrently shown increased interest and
trading by investors.
In connection with open interest, the Report reveals that, on
average, Quarterly Options Series account for 15% of total open
interest in Pilot Program securities. The open interest in Quarterly
Options Series has generally trended higher during the time period
evaluated. The December 2007 and March 2008 open interest in Quarterly
Options Series were markedly higher, at 18.2% and 18.1% of total
options open interest, respectively.
Accordingly, the Exchange believes that an extension of the Pilot
Program for one year, through July 10, 2009, is warranted in order to
satisfy the institutional demand for such options and provide
additional flexibility as well as an additional risk management tool to
investors.
The Exchange notes that it possesses the adequate systems capacity
to support the trading of Quarterly Options Series.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6 of Act \10\ in general and furthers the objectives of
Section 6(b)(5) of the Act \11\ 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 and, in general, to
protect investors and the public interest. The Exchange further
believes that an extension of the Quarterly Options Series Pilot
Program will benefit the marketplace and continue to provide investors
additional risk management tools.
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78f(b).
\11\ 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 does not 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.
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 \12\ and subparagraph (f)(6) of Rule
19b-4 thereunder.\13\
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 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.
---------------------------------------------------------------------------
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 Commission has determined that waiving the
30-day operative delay of the Exchange's proposal is consistent with
the protection of investors and the public interest and will promote
competition because such waiver will allow the Exchange to continue the
existing Quarterly Options Series Pilot Program without
interruption.\14\ Therefore, the Commission designates the proposal
operative upon filing.
---------------------------------------------------------------------------
\14\ 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
[[Page 39743]]
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-2008-57 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-Amex-2008-57. 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 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 No. SR-Amex-2008-57 and should be
submitted on or before July 31, 2008.
---------------------------------------------------------------------------
\15\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-15636 Filed 7-9-08; 8:45 am]
BILLING CODE 8010-01-P
