Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto by NASDAQ OMX PHLX, Inc. Relating to Settlement Values and Spot Prices for Foreign Currency Options, 67916-67918 [E8-27139]
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67916
Federal Register / Vol. 73, No. 222 / Monday, November 17, 2008 / Notices
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (www.sec.gov/rules/
sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–ISE–2008–85 on the subject
line.
Paper Comments
jlentini on PROD1PC65 with NOTICES
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street, NE.,
Washington, DC 20549–1090.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–58915; File No. SR–Phlx–
2008–68]
Self-Regulatory Organizations; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change and
Amendment No. 1 Thereto by NASDAQ
OMX PHLX, Inc. Relating to Settlement
Values and Spot Prices for Foreign
Currency Options
November 6, 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 October
All submissions should refer to File
30, 2008, NASDAQ OMX PHLX, Inc.
Number SR–ISE–2008–85. This file
(‘‘Phlx’’ or ‘‘Exchange’’) filed with the
number should be included on the
Securities and Exchange Commission
subject line if e-mail is used. To help the (‘‘SEC’’ or ‘‘Commission’’) the proposed
Commission process and review your
rule change as described in Items I and
comments more efficiently, please use
II below, which Items have been
only one method. The Commission will prepared by the Exchange. On
post all comments on the Commission’s November 6, 2008, the Exchange filed
Internet Web site (https://www.sec.gov/
Amendment No. 1 to the proposed rule
rules/sro.shtml). Copies of the
change. The Commission is publishing
submission, all subsequent
this notice to solicit comments on the
amendments, all written statements
proposed rule change, as amended, from
with respect to the proposed rule
interested persons.
change that are filed with the
I. Self-Regulatory Organization’s
Commission, and all written
Statement of the Terms of Substance of
communications relating to the
the Proposed Rule Change
proposed rule change between the
Commission and any person, other than
The Exchange, pursuant to Section
those that may be withheld from the
19(b)(1) of the Act 3 and Rule 19b–4
public in accordance with the
thereunder,4 proposes to modify the
provisions of 5 U.S.C. 552, will be
definition of the closing settlement
available for inspection and copying in
value for foreign currency options
the Commission’s Public Reference
traded on the Exchange (‘‘FCOs’’).
Room, 100 F Street, NE., Washington,
The text of the proposed rule change
DC 20549, on official business days
is available on the Exchange’s Web site
between the hours of 10 a.m. and 3 p.m. at https://www.phlx.com/regulatory/
Copies of the filing also will be available reg_rulefilings.aspx.
for inspection and copying at the
II. Self-Regulatory Organization’s
principal office of the Exchange. All
Statement of the Purpose of, and
comments received will be posted
Statutory Basis for, the Proposed Rule
without change; the Commission does
Change
not edit personal identifying
information from submissions. You
In its filing with the Commission, the
should submit only information that
Exchange included statements
you wish to make available publicly. All concerning the purpose of and basis for
submissions should refer to File
the proposed rule change and discussed
Number SR–ISE–2008–85 and should be any comments it received on the
submitted on or before December 8,
proposed rule change. The text of these
2008.
statements may be examined at the
places specified in Item IV below. The
For the Commission, by the Division of
Exchange has prepared summaries, set
Trading and Markets, pursuant to delegated
forth in sections A, B, and C below, of
authority.17
the most significant aspects of such
Florence E. Harmon,
statements.
Acting Secretary.
[FR Doc. E8–27157 Filed 11–14–08; 8:45 am]
BILLING CODE 8011–01–P
17 17
18:18 Nov 14, 2008
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(1).
4 17 CFR 240.19b–4.
2 17
CFR 200.30–3(a)(12).
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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 indicate that the spot price
at 12:00:00 Eastern Time (noon) on the
last trading day prior to expiration will
be the closing settlement value for FCOs
instead of the Noon Buying Rate.
The Exchange currently uses the
Noon Buying Rate, which it receives
from the Federal Reserve Bank of New
York (the ‘‘New York Fed’’),5 for the
purposes of setting the closing
settlement values of the Australian
dollar, the Euro, the British pound, the
Canadian dollar, the Swiss franc and the
Japanese yen. Going forward, the closing
settlement value for FCOs will be the
spot price at 12:00:00 Eastern Time
(noon) on the last trading day prior to
expiration.
By way of background, for all
currencies underlying FCOs trading on
the Exchange, it disseminates closing
(final) settlement values on its Web site,
and disseminates modified spot prices
over the facilities of the Consolidated
Tape Association (‘‘CTA’’) at least once
every fifteen seconds while the
Exchange is open for trading.6 Spot
prices are FCO quotations obtained by
the Exchange from a foreign currency
price quotation dissemination system
selected by the Exchange.7 The
Exchange calculates averages of bid and
ask values provided by Tenfore Systems
Limited (‘‘Tenfore’’) (the ‘‘Tenfore
Values’’) to get spot prices for FCOs.
The Exchange then calculates modified
spot prices for each of the foreign
currencies underlying its FCOs by
applying multipliers to the spot prices
(100 for the British pound, the
Australian dollar, the Canadian dollar
and the Swiss franc; and 10,000 for the
Japanese yen). Because the Tenfore
Values are expressed in foreign currency
units per U.S. dollar for the Japanese
yen, the Canadian dollar and the Swiss
franc (rather than in U.S. dollars per
unit of foreign currency as for other
5 On October 2, 2007, the New York Fed
announced its decision to discontinue the
publication of foreign exchange rates such as the
Noon Buying Rate on December 31, 2008, given the
availability of alternate market-based sources for
these rates. The Exchange believes that other
markets that trade foreign currency options, such as
for example the International Securities Exchange
(‘‘ISE’’), also use foreign currency rates provided by
the New York Fed. See ISE Rule 2212.
6 See Securities Exchange Act Release Nos. 55513
(March 22, 2007), 72 FR 14636 (March 28, 2007)
(SR–Phlx–2007–28) and 56034 (July 10, 2007), 72
FR 38853 (July 16, 2007) (SR–Phlx–2007–34).
7 See Phlx Rule 1000(b)16.
E:\FR\FM\17NON1.SGM
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Federal Register / Vol. 73, No. 222 / Monday, November 17, 2008 / Notices
currencies such as the Euro), in
calculating spot market prices for these
three currencies the Exchange uses the
inverse of the average of the Tenfore
Values (that is, one divided by the
average of the Tenfore Values).8
Settlement Value
jlentini on PROD1PC65 with NOTICES
Currently, the Exchange uses the
Noon Buying Rate for the closing
settlement value of the Australian
dollar, the Euro, the British pound, the
Canadian dollar, the Swiss franc and the
Japanese yen. The closing settlement
value for options on the Japanese yen,
the Canadian dollar and the Swiss franc
is an amount equal to one divided by
the day’s announced Noon Buying Rate,
as determined by the New York Fed on
the expiration date, rounded to the
nearest .0001 (except in the case of the
Japanese yen where the amount is
rounded to the nearest .000001). If the
Noon Buying Rate is not announced by
5 p.m. eastern time on expiration day,
the closing settlement value is based
upon the most recently announced
Noon Buying Rate, unless the Exchange
determines to apply an alternative
closing settlement value as a result of
extraordinary circumstances.
Going forward, the closing settlement
value for FCOs will be the spot price at
12:00:00 Eastern Time (noon) on the last
trading day prior to expiration as
calculated by the supplier of the data,9
and the Exchange will no longer need to
calculate an average of the Tenfore
Values nor calculate inverse values for
the Japanese yen, the Canadian dollar
and the Swiss franc to get proper spot
prices.10
8 The Exchange now gets Tenfore Values from
Thomson Financial LLC (‘‘Thomson’’) and uses
them to calculate spot and modified spot prices. It
is expected that in the future another entity,
QuoteMedia Inc. (‘‘QuoteMedia’’), will use the
Tenfore Values to calculate spot prices in the same
way that the Exchange now does, and will provide
the spot prices to NASDAQ OMX in the proper
format (already inverted for the Japanese yen, the
Canadian dollar, and the Swiss franc). NASDAQ
OMX will then apply the relevant multipliers to the
spot prices to calculate modified spot prices. As
part of NASDAQ OMX, the Exchange will have
access to the spot prices and the modified spot
prices on or after November 3, 2008, and will no
longer need to perform any calculations regarding
them. The Exchange will continue to disseminate
modified spot prices over the facilities of the CTA,
or through one or more major market data vendors,
at least once every fifteen seconds while the
Exchange is open for trading.
9 Similarly to modified spot prices, the Exchange
will disseminate settlement values over the
facilities of the CTA or through one or more major
market data vendors, such that settlement values
should be available to users at the same time.
10 The Exchange is proposing conforming changes
to its Rule 1079.
VerDate Aug<31>2005
18:18 Nov 14, 2008
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2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act 11 in general, and furthers the
objectives of Section 6(b)(5) of the Act 12
in particular, in that it is designed to
promote just and equitable principles of
trade, 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, by
enabling the Exchange to continue
providing closing settlement values for
FCOs to its customers.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition 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 either
solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 13 and Rule 19b–
4(f)(6) thereunder.14
The Exchange has requested that the
Commission waive the 30-day operative
delay. The Commission believes that
waiver of the 30-day operative delay is
consistent with the protection of
investors and the public interest. The
Commission notes that this filing allows
the Exchange to continue providing
FCO data (with no substantive changes
to the data or its calculation) to public
customers. As the Exchange is
consolidating certain systems with other
NASDAQ OMX Group systems, the
11 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
13 15 U.S.C. 78s(b)(3)(A).
14 17 CFR 240.19b–4(f)(6). Rule 19b–4(f)(6) also
requires the self-regulatory organization to give the
Commission 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. Phlx has satisfied the five-day prefiling requirement.
12 15
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67917
Exchange believes that waiving the 30day operative delay will allow the
Exchange to provide FCO data in the
most efficient and cost-effective way,
and in the timeliest manner, to the
benefit of investors. The Exchange
believes that on or after November 3,
2008, when the Exchange will no longer
need to conduct data calculations,
investors should find that they are able
to access FCO data faster and at times
when it previously would not be
available. Accordingly, the Commission
designates the proposal to be operative
upon filing with the Commission.15
At any time within 60 days of the
filing of the proposed rule change, the
Commission may summarily abrogate
such rule change if it appears to the
Commission that such action is
necessary or appropriate in the public
interest, for the protection of investors,
or otherwise in furtherance of the
purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–Phlx–2008–68 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–Phlx–2008–68. 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
15 For purposes only of waiving the 30-day
operative delay of this proposal, the Commission
has considered the proposed rule’s impact on
efficiency, competition, and capital formation. 15
U.S.C. 78c(f).
E:\FR\FM\17NON1.SGM
17NON1
67918
Federal Register / Vol. 73, No. 222 / Monday, November 17, 2008 / Notices
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, on official business days between
the hours of 10 a.m. and 3 p.m. Copies
of the filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–Phlx–
2008–68 and should be submitted on or
before December 8, 2008.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8–27139 Filed 11–14–08; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–58901; File No. SR–OCC–
2008–06]
Self-Regulatory Organizations; The
Options Clearing Corporation; Notice
of Filing of a Proposed Rule Change
Relating to the Stock Loan/Hedge
Program
November 5, 2008.
Pursuant to section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 notice is hereby given that on
February 25, 2008, The Options Clearing
Corporation (‘‘OCC’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) and on October 7,
2008, amended the proposed rule
change described in Items I, II, and III
below, which items have been prepared
primarily by OCC. The Commission is
publishing this notice to solicit
comments from interested persons.
jlentini on PROD1PC65 with NOTICES
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The proposed rule change would
mitigate inconsistencies that may result
under the Stock Loan/Hedge Program.
16 17
1 15
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
VerDate Aug<31>2005
18:18 Nov 14, 2008
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
OCC 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. OCC has prepared
summaries, set forth in sections (A), (B),
and (C) below, of the most significant
aspects of these statements.2
(A) Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
OCC has decided to take certain steps
to provide for the continued growth and
development of its Stock Loan/Hedge
Program (‘‘Program’’). These include (1)
elimination of the ability of clearing
members to carry stock loan and borrow
positions without depositing risk
margin and (2) adjusting the amount of
required risk margin where stock loan
collateral provided by the borrower to
the lender exceeds the value of the
borrowed stock.
Background and General Description of
the Proposed Rule Change.
The Program is provided for in Article
XXI of OCC’s By-Laws and Chapter XXII
of the Rules. It provides a means for
OCC clearing members to submit certain
stock loan/borrow transactions (‘‘stock
loan transactions’’) to OCC for
clearance. The stock and the stock loan
collateral move through the facilities of
The Depository Trust Company from the
lending clearing member (‘‘lender’’) to
the borrowing clearing member
(‘‘borrower’’), and vice-versa when the
stock is returned, in the same way that
such transactions are ordinarily
effected. Where the stock loan
transaction is submitted to OCC for
clearance, however, OCC is substituted
as the lender to the borrower and the
borrower to the lender. Thereafter, OCC
guarantees performance of the stock
loan transaction with respect to delivery
and return of stock and collateral and
the making of daily mark-to-market
payments between the lender and
borrower, which are effected through
OCC’s cash settlement system.
One advantage of submitting stock
loan transactions to OCC is that the
stock loan and borrow positions then
reside in the clearing member’s options
accounts at OCC and to the extent that
2 The Commission has modified the text of the
summaries prepared by OCC.
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they offset the risk of options positions
carried in the same account, may reduce
the clearing member’s margin
requirement in the account. OCC’s risk
is, in turn, reduced by having the
benefit of the hedge. Nevertheless, OCC
currently permits qualified clearing
members to elect to submit stock loan
and borrow transactions to OCC on a
‘‘margin ineligible basis,’’ meaning that
the positions are excluded from OCC’s
margin calculations for the account
containing those positions. Marginineligible stock loan and borrow
positions do not reduce the margin
requirement for the account to reflect
any offsetting value they might have,
nor does OCC collect additional margin
to reflect the risk of those positions. The
election is made by each clearing
member on an account-by-account basis
so that all stock loan and borrow
positions in a particular account are
carried on a margin ineligible basis or
none are. In order to carry stock loan
and borrow positions on a margin
ineligible basis, a clearing member must
meet heightened standards of
creditworthiness as set forth in
Interpretation and Policy .06 under
Section 1 of Article V of OCC’s By-Laws.
While OCC believes that the current
credit-based risk management approach
has been adequate to date given
historical Program activity levels, OCC
also believes that a more conservative
approach is warranted to provide for
further growth of the Program and
greater market volatility. OCC therefore
seeks to better manage the market risk
resulting from open stock loan and
borrow positions by applying its
standard margining approach to all such
positions.
Another potential exposure that OCC
seeks to address arises from the stock
loan market practice of requiring the
borrower to overcollateralize a position
by giving the lender cash collateral
equal to 102% of the position’s current
market value. OCC’s rules provide that
OCC’s guarantee of Program transactions
extends to the full value of the collateral
exchanged as part of a stock loan
transaction. Therefore, if a lender were
to fail, even if the stock could be sold
out at 100% of the marking price, the
borrower would be left with a 2%
deficiency, for which OCC would be
liable. Managing this potential exposure
will be accomplished by (a) an
additional margin charge applied to
lenders executing stock loans at 102%
in an amount equal to the 2% excess
collateral and (b) borrowers receiving a
margin credit in an equal amount. These
new margin charges/credits are
independent of, and in addition to, the
risk margin determined by the
E:\FR\FM\17NON1.SGM
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]]>Agencies
[Federal Register Volume 73, Number 222 (Monday, November 17, 2008)]
[Notices]
[Pages 67916-67918]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-27139]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-58915; File No. SR-Phlx-2008-68]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto by
NASDAQ OMX PHLX, Inc. Relating to Settlement Values and Spot Prices for
Foreign Currency Options
November 6, 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 October 30, 2008, NASDAQ OMX PHLX, Inc. (``Phlx'' or ``Exchange'')
filed with the Securities and Exchange Commission (``SEC'' or
``Commission'') the proposed rule change as described in Items I and II
below, which Items have been prepared by the Exchange. On November 6,
2008, the Exchange filed Amendment No. 1 to the proposed rule change.
The Commission is publishing this notice to solicit comments on the
proposed rule change, as amended, from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange, pursuant to Section 19(b)(1) of the Act \3\ and Rule
19b-4 thereunder,\4\ proposes to modify the definition of the closing
settlement value for foreign currency options traded on the Exchange
(``FCOs'').
---------------------------------------------------------------------------
\3\ 15 U.S.C. 78s(b)(1).
\4\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
The text of the proposed rule change is available on the Exchange's
Web site at https://www.phlx.com/regulatory/reg_rulefilings.aspx.
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 indicate that the
spot price at 12:00:00 Eastern Time (noon) on the last trading day
prior to expiration will be the closing settlement value for FCOs
instead of the Noon Buying Rate.
The Exchange currently uses the Noon Buying Rate, which it receives
from the Federal Reserve Bank of New York (the ``New York Fed''),\5\
for the purposes of setting the closing settlement values of the
Australian dollar, the Euro, the British pound, the Canadian dollar,
the Swiss franc and the Japanese yen. Going forward, the closing
settlement value for FCOs will be the spot price at 12:00:00 Eastern
Time (noon) on the last trading day prior to expiration.
---------------------------------------------------------------------------
\5\ On October 2, 2007, the New York Fed announced its decision
to discontinue the publication of foreign exchange rates such as the
Noon Buying Rate on December 31, 2008, given the availability of
alternate market-based sources for these rates. The Exchange
believes that other markets that trade foreign currency options,
such as for example the International Securities Exchange (``ISE''),
also use foreign currency rates provided by the New York Fed. See
ISE Rule 2212.
---------------------------------------------------------------------------
By way of background, for all currencies underlying FCOs trading on
the Exchange, it disseminates closing (final) settlement values on its
Web site, and disseminates modified spot prices over the facilities of
the Consolidated Tape Association (``CTA'') at least once every fifteen
seconds while the Exchange is open for trading.\6\ Spot prices are FCO
quotations obtained by the Exchange from a foreign currency price
quotation dissemination system selected by the Exchange.\7\ The
Exchange calculates averages of bid and ask values provided by Tenfore
Systems Limited (``Tenfore'') (the ``Tenfore Values'') to get spot
prices for FCOs. The Exchange then calculates modified spot prices for
each of the foreign currencies underlying its FCOs by applying
multipliers to the spot prices (100 for the British pound, the
Australian dollar, the Canadian dollar and the Swiss franc; and 10,000
for the Japanese yen). Because the Tenfore Values are expressed in
foreign currency units per U.S. dollar for the Japanese yen, the
Canadian dollar and the Swiss franc (rather than in U.S. dollars per
unit of foreign currency as for other
[[Page 67917]]
currencies such as the Euro), in calculating spot market prices for
these three currencies the Exchange uses the inverse of the average of
the Tenfore Values (that is, one divided by the average of the Tenfore
Values).\8\
---------------------------------------------------------------------------
\6\ See Securities Exchange Act Release Nos. 55513 (March 22,
2007), 72 FR 14636 (March 28, 2007) (SR-Phlx-2007-28) and 56034
(July 10, 2007), 72 FR 38853 (July 16, 2007) (SR-Phlx-2007-34).
\7\ See Phlx Rule 1000(b)16.
\8\ The Exchange now gets Tenfore Values from Thomson Financial
LLC (``Thomson'') and uses them to calculate spot and modified spot
prices. It is expected that in the future another entity, QuoteMedia
Inc. (``QuoteMedia''), will use the Tenfore Values to calculate spot
prices in the same way that the Exchange now does, and will provide
the spot prices to NASDAQ OMX in the proper format (already inverted
for the Japanese yen, the Canadian dollar, and the Swiss franc).
NASDAQ OMX will then apply the relevant multipliers to the spot
prices to calculate modified spot prices. As part of NASDAQ OMX, the
Exchange will have access to the spot prices and the modified spot
prices on or after November 3, 2008, and will no longer need to
perform any calculations regarding them. The Exchange will continue
to disseminate modified spot prices over the facilities of the CTA,
or through one or more major market data vendors, at least once
every fifteen seconds while the Exchange is open for trading.
---------------------------------------------------------------------------
Settlement Value
Currently, the Exchange uses the Noon Buying Rate for the closing
settlement value of the Australian dollar, the Euro, the British pound,
the Canadian dollar, the Swiss franc and the Japanese yen. The closing
settlement value for options on the Japanese yen, the Canadian dollar
and the Swiss franc is an amount equal to one divided by the day's
announced Noon Buying Rate, as determined by the New York Fed on the
expiration date, rounded to the nearest .0001 (except in the case of
the Japanese yen where the amount is rounded to the nearest .000001).
If the Noon Buying Rate is not announced by 5 p.m. eastern time on
expiration day, the closing settlement value is based upon the most
recently announced Noon Buying Rate, unless the Exchange determines to
apply an alternative closing settlement value as a result of
extraordinary circumstances.
Going forward, the closing settlement value for FCOs will be the
spot price at 12:00:00 Eastern Time (noon) on the last trading day
prior to expiration as calculated by the supplier of the data,\9\ and
the Exchange will no longer need to calculate an average of the Tenfore
Values nor calculate inverse values for the Japanese yen, the Canadian
dollar and the Swiss franc to get proper spot prices.\10\
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\9\ Similarly to modified spot prices, the Exchange will
disseminate settlement values over the facilities of the CTA or
through one or more major market data vendors, such that settlement
values should be available to users at the same time.
\10\ The Exchange is proposing conforming changes to its Rule
1079.
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2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act \11\ in general, and furthers the objectives of Section
6(b)(5) of the Act \12\ in particular, in that it is designed to
promote just and equitable principles of trade, 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, by enabling the Exchange to continue providing closing
settlement values for FCOs to its customers.
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\11\ 15 U.S.C. 78f(b).
\12\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition 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 either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \13\ and Rule 19b-
4(f)(6) thereunder.\14\
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\13\ 15 U.S.C. 78s(b)(3)(A).
\14\ 17 CFR 240.19b-4(f)(6). Rule 19b-4(f)(6) also requires the
self-regulatory organization to give the Commission 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. Phlx
has satisfied the five-day pre-filing requirement.
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The Exchange has requested that the Commission waive the 30-day
operative delay. The Commission believes that waiver of the 30-day
operative delay is consistent with the protection of investors and the
public interest. The Commission notes that this filing allows the
Exchange to continue providing FCO data (with no substantive changes to
the data or its calculation) to public customers. As the Exchange is
consolidating certain systems with other NASDAQ OMX Group systems, the
Exchange believes that waiving the 30-day operative delay will allow
the Exchange to provide FCO data in the most efficient and cost-
effective way, and in the timeliest manner, to the benefit of
investors. The Exchange believes that on or after November 3, 2008,
when the Exchange will no longer need to conduct data calculations,
investors should find that they are able to access FCO data faster and
at times when it previously would not be available. Accordingly, the
Commission designates the proposal to be operative upon filing with the
Commission.\15\
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\15\ For purposes only of waiving the 30-day operative delay of
this proposal, the Commission has considered the proposed rule's
impact on efficiency, competition, and capital formation. 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate such rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-Phlx-2008-68 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-Phlx-2008-68. 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
[[Page 67918]]
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, on official business
days between the hours of 10 a.m. and 3 p.m. Copies of the filing also
will be available for inspection and copying at the principal office of
the Exchange. All comments received will be posted without change; the
Commission does not edit personal identifying information from
submissions. You should submit only information that you wish to make
available publicly. All submissions should refer to File Number SR-
Phlx-2008-68 and should be submitted on or before December 8, 2008.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
Florence E. Harmon,
Acting Secretary.
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\16\ 17 CFR 200.30-3(a)(12).
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[FR Doc. E8-27139 Filed 11-14-08; 8:45 am]
BILLING CODE 8011-01-P
