Joint Industry Plan; Order Granting Permanent Approval to Amendment No. 2 to the Plan for the Purpose of Developing and Implementing Procedures Designed To Facilitate the Listing and Trading of Standardized Options, 57166-57167 [E8-22965]
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57166
Federal Register / Vol. 73, No. 191 / Wednesday, October 1, 2008 / Notices
reasonably designed to monitor any
purchases of securities by the
Unaffiliated Fund in an Affiliated
Underwriting once an investment by a
Fund of Funds in the securities of the
Unaffiliated Fund exceeds the limit of
section 12(d)(1)(A)(i) of the Act,
including any purchases made directly
from an Underwriting Affiliate. The
Board of the Unaffiliated Fund will
review these purchases periodically, but
no less frequently than annually, to
determine whether the purchases were
influenced by the investment by the
Fund of Funds in shares of the
Unaffiliated Fund. The Board of the
Unaffiliated Fund will consider, among
other things: (a) Whether the purchases
were consistent with the investment
objectives and policies of the
Unaffiliated Fund; (b) how the
performance of securities purchased in
an Affiliated Underwriting compares to
the performance of comparable
securities purchased during a
comparable period of time in
underwritings other than Affiliated
Underwritings or to a benchmark such
as a comparable market index; and (c)
whether the amount of securities
purchased by the Unaffiliated Fund in
Affiliated Underwritings and the
amount purchased directly from an
Underwriting Affiliate have changed
significantly from prior years. The
Board of the Unaffiliated Fund will take
any appropriate actions based on its
review, including, if appropriate, the
institution of procedures designed to
ensure that purchases of securities in
Affiliated Underwritings are in the best
interests of shareholders.
7. Each Unaffiliated Fund will
maintain and preserve permanently in
an easily accessible place a written copy
of the procedures described in the
preceding condition, and any
modifications to such procedures, and
will maintain and preserve for a period
of not less than six years from the end
of the fiscal year in which any purchase
from an Affiliated Underwriting
occurred, the first two years in an easily
accessible place, a written record of
each purchase made once an investment
by a Fund of Funds in the securities of
an Unaffiliated Fund exceeds the limit
of section 12(d)(1)(A)(i) of the Act,
setting forth from whom the securities
were acquired, the identity of the
underwriting syndicate’s members, the
terms of the purchase, and the
information or materials upon which
the determinations of the Board of the
Unaffiliated Fund were made.
8. Prior to its investment in shares of
an Unaffiliated Fund in excess of the
limit in section 12(d)(1)(A)(i) of the Act,
the Fund of Funds and the Unaffiliated
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Fund will execute a Participation
Agreement stating, without limitation,
that their boards of directors or trustees
and their investment advisers
understand the terms and conditions of
the order and agree to fulfill their
responsibilities under the order. At the
time of its investment in shares of an
Unaffiliated Fund in excess of the limit
in section 12(d)(1)(A)(i), a Fund of
Funds will notify the Unaffiliated Fund
of the investment. At such time, the
Fund of Funds will also transmit to the
Unaffiliated Fund a list of the names of
each Fund of Funds Affiliate and
Underwriting Affiliate. The Fund of
Funds will notify the Unaffiliated Fund
of any changes to the list as soon as
reasonably practicable after a change
occurs. The Unaffiliated Fund and the
Fund of Funds will maintain and
preserve a copy of the order, the
Participation Agreement, and the list
with any updated information for the
duration of the investment and for a
period of not less than six years
thereafter, the first two years in an
easily accessible place.
9. Prior to approving any investment
advisory contract under section 15 of
the Act, each Fund of Funds Board,
including a majority of the Disinterested
Trustees, will find that the advisory fees
charged under the advisory contract are
based on services provided that are in
addition to, rather than duplicative of,
services provided under the advisory
contract(s) of any Underlying Funds in
which the Fund of Funds may invest.
This finding, and the basis upon which
the finding was made, will be recorded
fully in the minute books of the
appropriate Fund of Funds.
10. The Adviser will waive fees
otherwise payable to it by the Fund of
Funds in an amount at least equal to any
compensation (including fees received
pursuant to a plan adopted by an
Unaffiliated Fund under rule 12b–1
under the Act) received by the Adviser,
or an affiliated person of the Adviser,
from an Unaffiliated Underlying Fund,
other than any advisory fees paid to the
Adviser or an affiliated person of the
Adviser by the Unaffiliated Fund, in
connection with the investment by the
Fund of Funds in the Unaffiliated
Underlying Fund. Any Subadviser will
waive fees otherwise payable to the
Subadviser, directly or indirectly, by the
Fund of Funds in an amount at least
equal to any compensation received by
the Subadviser, or an affiliated person of
the Subadviser, from an Unaffiliated
Underlying Fund, other than any
advisory fees paid to the Subadviser or
an affiliated person of the Subadviser by
the Unaffiliated Fund, in connection
with the investment by the Fund of
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Funds in the Unaffiliated Underlying
Fund made at the direction of the
Subadviser. In the event that the
Subadviser waives fees, the benefit of
the waiver will be passed through to the
Fund of Funds.
11. No Underlying Fund will acquire
securities of any other investment
company or company relying on section
3(c)(1) or 3(c)(7) of the Act, in excess of
the limits contained in section
12(d)(1)(A) of the Act, except to the
extent that such Underlying Fund: (a)
Receives securities of another
investment company as a dividend or as
a result of a plan of reorganization of a
company (other than a plan devised for
the purpose of evading section 12(d)(1)
of the Act); or (b) acquires (or is deemed
to have acquired) securities of another
investment company pursuant to
exemptive relief from the Commission
permitting such Underlying Fund to: (i)
Acquire securities of one or more
investment companies for short-term
cash management purposes, or (ii)
engage in interfund borrowing and
lending transactions.
12. Any sales charges and/or service
fees charged with respect to shares of a
Fund of Funds will not exceed the
limits applicable to funds of funds set
forth in NASD Conduct Rule 2830.
For the Commission, by the Division of
Investment Management, pursuant to
delegated authority.
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8–23043 Filed 9–30–08; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–58630; File No. 4–443]
Joint Industry Plan; Order Granting
Permanent Approval to Amendment
No. 2 to the Plan for the Purpose of
Developing and Implementing
Procedures Designed To Facilitate the
Listing and Trading of Standardized
Options
September 24, 2008.
I. Introduction
On August 12, 2008, August 18, 2008,
August 15, 2008, August 13, 2008,
August 8, 2008, August 14, 2008,
August 14, 2008, and August 18, 2008,
the American Stock Exchange LLC
(‘‘Amex’’), the Boston Stock Exchange,
Inc. (‘‘BSE’’), Chicago Board Options
Exchange, Incorporated (‘‘CBOE’’), the
International Securities Exchange, LLC
(‘‘ISE’’), The NASDAQ Stock Market
LLC (‘‘Nasdaq’’), NYSE Arca Inc.
E:\FR\FM\01OCN1.SGM
01OCN1
Federal Register / Vol. 73, No. 191 / Wednesday, October 1, 2008 / Notices
(‘‘NYSE Arca’’), the Philadelphia Stock
Exchange, Inc. (‘‘Phlx’’), and the
Options Clearing Corporation (‘‘OCC’’)
respectively, filed with the Securities
and Exchange Commission
(‘‘Commission’’), pursuant to section
11A of the Securities Exchange Act 1 of
1934 (‘‘Act’’) and Rule 608 thereunder,2
Amendment No. 2 to the Plan for the
Purpose of Developing and
Implementing Procedures Designed to
Facilitate the Listing and Trading of
Standardized Options (‘‘the Options
Listing Procedures Plan’’ or ‘‘OLPP’’).3
Amendment No. 2 would provide a
uniform minimum volume threshold
per underlying class to qualify for the
introduction of a new expiration year of
Long-term Equity AnticiPation
securities (‘‘LEAP’’ or ‘‘LEAPS’’)
options.
On August 19, 2008, the Commission
issued notice of and approved
Amendment No. 2 on a temporary basis
not to exceed 120 days, and solicited
comment on the proposal.4 The
Commission received no comment
letters in response to the Temporary
Approval Order. This order approves
Amendment No. 2 on a permanent
basis.
II. Description of the Proposal
Currently, Plan Sponsors may list a
new LEAP expiration year at the
appropriate time without any
consideration as to the activity level of
the class of options. Amendment No. 2
proposes to apply a uniform minimum
volume threshold per underlying class
to qualify for the introduction of a new
expiration year of LEAP options.
By agreeing to a minimum volume
threshold per underlying class to qualify
for an additional year of LEAP series,
the Plan Sponsors intend to mitigate the
number of option series available for
trading. It is intended that this will in
turn mitigate quote traffic, because
Participants will not be submitting
quotes in the not-listed series. The Plan
Sponsors have agreed on a minimum
volume threshold of 1,000 contracts
national average daily volume in the
1 15
U.S.C. 78k–1.
CFR 242.608.
3 On July 6, 2001, the Commission approved the
OLPP, which was originally proposed by the Amex,
CBOE, ISE, OCC, Phlx, and Pacific Exchange, Inc.
(k/n/a NYSE Arca). See Securities Exchange Act
Release No. 44521, 66 FR 36809 (July 13, 2001). On
February 5, 2004, BSE was added as a sponsor to
the OLPP. See Securities Exchange Act Release No.
49199, 69 FR 7030 (February 12, 2004). On March
21, 2008, Nasdaq was added as a sponsor to the
OLPP. See Securities Exchange Act Release No.
57546 (March 21, 2008), 73 FR 16393 (March 27,
2008).
4 See Securities Exchange Act Release No. 58385
(August 19, 2008), 73 FR 50375 (August 26, 2008)
(‘‘Temporary Approval Order’’).
jlentini on PROD1PC65 with NOTICES
2 17
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preceding three calendar months
(excluding volume in LEAP and FLEX
series) to qualify for the introduction of
a new LEAP expiration year.5
The Amendment does not restrict the
introduction of a new LEAP expiration
year in Index options, or in classes that
have had options products trading at
any exchange for less than six months.
In addition, it also does not restrict, for
a particular options class, the
introduction of new LEAP series with
an expiration year that has already been
introduced by at least one Exchange.
III. Discussion
After careful review, the Commission
finds that Amendment No. 2 is
consistent with the requirements of the
Act and the rules and regulations
thereunder.6 Specifically, the
Commission finds that Amendment No.
2 to the OLPP is consistent with section
11A of the Act 7 and Rule 608
thereunder 8 in that it is in the public
interest and appropriate for the
protection of investors and the
maintenance of fair and orderly markets.
Specifically, the Commission believes
that by adopting a uniform minimum
volume threshold per underlying class
to qualify for the introduction of a new
expiration year for LEAP series, the
options exchanges should reduce the
number of option series available for
trading, and thus may reduce increases
in the options quote rate because market
participants would not be submitting
quotes in the not-yet-available LEAP
series. Accordingly, the Commission
believes that it is necessary or
appropriate in the public interest, for
the protection of investors and the
maintenance of fair and orderly markets,
to remove impediments to, and perfect
mechanisms of, a national market
system to approve Amendment No. 2 to
the OLPP on a permanent basis.
IV. Conclusion
It is therefore ordered, pursuant to
section 11A of the Act,9 and Rule 608
thereunder,10 that proposed
Amendment No. 2 to the OLPP be, and
5 The Plan Sponsors represented that, in 2007, if
this proposal had been in effect, the industry would
not have added a new expiration year in 550
underlying securities, which would have reduced
the overall number of listed series (LEAP and nonLEAP series) by 8%. These LEAP series generated
only .43% of industry trading volume in a typical
(non-expiration) sample week.
6 In approving this proposed OPRA Plan
Amendment, the Commission has considered its
impact on efficiency, competition, and capital
formation. 15 U.S.C. 78c(f).
7 15 U.S.C. 78k–1.
8 17 CFR 242.608.
9 15 U.S.C. 78k–1.
10 17 CFR 242.608.
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57167
it hereby is, approved on a permanent
basis.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8–22965 Filed 9–30–08; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release Nos. 33–8962; 34–58657; File No.
4–567]
Roundtable on Modernizing the SEC’s
Disclosure System
Securities and Exchange
Commission.
AGENCY:
Notice of roundtable discussion;
request for comment.
ACTION:
SUMMARY: On October 8, 2008 from 9
a.m. to 1 p.m., the Securities and
Exchange Commission will hold a
roundtable to discuss ways in which its
current disclosure system can be
modernized to provide investors more
useful and timely information to help
them make investment choices. The
roundtable will be organized as two
panels. The panels will be moderated by
Commission staff and will include
investor representatives, company
officials, information intermediaries,
practitioners, and academics. The
roundtable is part of the Commission’s
21st Century Disclosure Initiative.
The roundtable will be held in the
auditorium of SEC headquarters at 100
F Street, NE., Washington, DC, from 9
a.m. until approximately 1 p.m. The
roundtable will be open to the public
with seating on a first-come, first-served
basis. The roundtable discussions will
be Webcast on the Commission’s Web
site at https://www.sec.gov. The
roundtable agenda and other related
materials, including a list of participants
and moderators, will be accessible at
https://www.sec.gov/disclosureinitiative.
The Commission welcomes comments
regarding any of the topics to be
addressed at the roundtable and is
particularly interested in comments
responding to the questions that are set
forth below.
We must receive comments on or
before October 22, 2008.
DATES:
You may submit your
comments by any of the following
methods:
ADDRESSES:
11 17
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CFR 200.30–3(a)(29).
01OCN1
]]>Agencies
[Federal Register Volume 73, Number 191 (Wednesday, October 1, 2008)]
[Notices]
[Pages 57166-57167]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-22965]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-58630; File No. 4-443]
Joint Industry Plan; Order Granting Permanent Approval to
Amendment No. 2 to the Plan for the Purpose of Developing and
Implementing Procedures Designed To Facilitate the Listing and Trading
of Standardized Options
September 24, 2008.
I. Introduction
On August 12, 2008, August 18, 2008, August 15, 2008, August 13,
2008, August 8, 2008, August 14, 2008, August 14, 2008, and August 18,
2008, the American Stock Exchange LLC (``Amex''), the Boston Stock
Exchange, Inc. (``BSE''), Chicago Board Options Exchange, Incorporated
(``CBOE''), the International Securities Exchange, LLC (``ISE''), The
NASDAQ Stock Market LLC (``Nasdaq''), NYSE Arca Inc.
[[Page 57167]]
(``NYSE Arca''), the Philadelphia Stock Exchange, Inc. (``Phlx''), and
the Options Clearing Corporation (``OCC'') respectively, filed with the
Securities and Exchange Commission (``Commission''), pursuant to
section 11A of the Securities Exchange Act \1\ of 1934 (``Act'') and
Rule 608 thereunder,\2\ Amendment No. 2 to the Plan for the Purpose of
Developing and Implementing Procedures Designed to Facilitate the
Listing and Trading of Standardized Options (``the Options Listing
Procedures Plan'' or ``OLPP'').\3\ Amendment No. 2 would provide a
uniform minimum volume threshold per underlying class to qualify for
the introduction of a new expiration year of Long-term Equity
AnticiPation securities (``LEAP'' or ``LEAPS'') options.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78k-1.
\2\ 17 CFR 242.608.
\3\ On July 6, 2001, the Commission approved the OLPP, which was
originally proposed by the Amex, CBOE, ISE, OCC, Phlx, and Pacific
Exchange, Inc. (k/n/a NYSE Arca). See Securities Exchange Act
Release No. 44521, 66 FR 36809 (July 13, 2001). On February 5, 2004,
BSE was added as a sponsor to the OLPP. See Securities Exchange Act
Release No. 49199, 69 FR 7030 (February 12, 2004). On March 21,
2008, Nasdaq was added as a sponsor to the OLPP. See Securities
Exchange Act Release No. 57546 (March 21, 2008), 73 FR 16393 (March
27, 2008).
---------------------------------------------------------------------------
On August 19, 2008, the Commission issued notice of and approved
Amendment No. 2 on a temporary basis not to exceed 120 days, and
solicited comment on the proposal.\4\ The Commission received no
comment letters in response to the Temporary Approval Order. This order
approves Amendment No. 2 on a permanent basis.
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 58385 (August 19,
2008), 73 FR 50375 (August 26, 2008) (``Temporary Approval Order'').
---------------------------------------------------------------------------
II. Description of the Proposal
Currently, Plan Sponsors may list a new LEAP expiration year at the
appropriate time without any consideration as to the activity level of
the class of options. Amendment No. 2 proposes to apply a uniform
minimum volume threshold per underlying class to qualify for the
introduction of a new expiration year of LEAP options.
By agreeing to a minimum volume threshold per underlying class to
qualify for an additional year of LEAP series, the Plan Sponsors intend
to mitigate the number of option series available for trading. It is
intended that this will in turn mitigate quote traffic, because
Participants will not be submitting quotes in the not-listed series.
The Plan Sponsors have agreed on a minimum volume threshold of 1,000
contracts national average daily volume in the preceding three calendar
months (excluding volume in LEAP and FLEX series) to qualify for the
introduction of a new LEAP expiration year.\5\
---------------------------------------------------------------------------
\5\ The Plan Sponsors represented that, in 2007, if this
proposal had been in effect, the industry would not have added a new
expiration year in 550 underlying securities, which would have
reduced the overall number of listed series (LEAP and non-LEAP
series) by 8%. These LEAP series generated only .43% of industry
trading volume in a typical (non-expiration) sample week.
---------------------------------------------------------------------------
The Amendment does not restrict the introduction of a new LEAP
expiration year in Index options, or in classes that have had options
products trading at any exchange for less than six months. In addition,
it also does not restrict, for a particular options class, the
introduction of new LEAP series with an expiration year that has
already been introduced by at least one Exchange.
III. Discussion
After careful review, the Commission finds that Amendment No. 2 is
consistent with the requirements of the Act and the rules and
regulations thereunder.\6\ Specifically, the Commission finds that
Amendment No. 2 to the OLPP is consistent with section 11A of the Act
\7\ and Rule 608 thereunder \8\ in that it is in the public interest
and appropriate for the protection of investors and the maintenance of
fair and orderly markets. Specifically, the Commission believes that by
adopting a uniform minimum volume threshold per underlying class to
qualify for the introduction of a new expiration year for LEAP series,
the options exchanges should reduce the number of option series
available for trading, and thus may reduce increases in the options
quote rate because market participants would not be submitting quotes
in the not-yet-available LEAP series. Accordingly, the Commission
believes that it is necessary or appropriate in the public interest,
for the protection of investors and the maintenance of fair and orderly
markets, to remove impediments to, and perfect mechanisms of, a
national market system to approve Amendment No. 2 to the OLPP on a
permanent basis.
---------------------------------------------------------------------------
\6\ In approving this proposed OPRA Plan Amendment, the
Commission has considered its impact on efficiency, competition, and
capital formation. 15 U.S.C. 78c(f).
\7\ 15 U.S.C. 78k-1.
\8\ 17 CFR 242.608.
---------------------------------------------------------------------------
IV. Conclusion
It is therefore ordered, pursuant to section 11A of the Act,\9\ and
Rule 608 thereunder,\10\ that proposed Amendment No. 2 to the OLPP be,
and it hereby is, approved on a permanent basis.
---------------------------------------------------------------------------
\9\ 15 U.S.C. 78k-1.
\10\ 17 CFR 242.608.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
---------------------------------------------------------------------------
\11\ 17 CFR 200.30-3(a)(29).
---------------------------------------------------------------------------
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-22965 Filed 9-30-08; 8:45 am]
BILLING CODE 8010-01-P
