Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by NASDAQ OMX PHLX, Inc. Relating to Temporarily Increasing the Number of Additional Quarterly Option Series in Exchange-Traded Fund Options, 70398-70400 [E8-27578]
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70398
Federal Register / Vol. 73, No. 225 / Thursday, November 20, 2008 / Notices
indicate that in addition to there being
ten (10) FXCMMs for each currency pair
listed for trading by the Exchange, there
shall also be ten (10) FXCMMs for each
foreign currency index option the
Exchange may list in the future and that
the Exchange will conduct one (1)
FXCMM trading license auction per
each currency pair and per each foreign
currency index option. Finally,
members will be limited to holding no
more than one (1) FXCMM trading
license per currency pair and no more
than one (1) FXCMM trading license per
foreign currency index option.
2. Statutory Basis
The basis under the Act for this
proposed rule change is the requirement
under Section 6(b)(5) that an exchange
have rules that are designed to prevent
fraudulent and manipulative acts and
practices, to promote just and equitable
principles of trade, to remove
impediments to and perfect the
mechanism for a free and open market
and a national market system, and, in
general, to protect investors and the
public interest. In particular, the
proposed rule change will strengthen
the Exchange’s foreign currency
products by providing them with
permanent market making support. A
permanent allocation of foreign
currency products will also allow
FXPMMs to create and execute a longterm strategy to promote growth and
trading in the foreign currency product
that has been allocated to it.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
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.
rwilkins on PROD1PC63 with NOTICES
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange has not solicited, and
does not intend to solicit, comments on
this proposed rule change. The
Exchange has not received any
unsolicited written comments from
members or other interested parties.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
This proposed rule change does not
significantly affect the protection of
investors or the public interest, does not
impose any significant burden on
competition, and, by its terms, does not
become operative for 30 days after the
date of the filing, or such shorter time
as the Commission may designate if
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18:26 Nov 19, 2008
Jkt 217001
consistent with the protection of
investors and the public interest. The
Exchange provided 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
the proposed rule change as required by
Rule 19b–4(f)(6).9 For the foregoing
reasons, the Exchange believes the
proposed rule filing qualifies for
immediate effectiveness as a ‘‘noncontroversial’’ rule change under
paragraph (f)(6) of Rule 19b–4 of the
Act.
The proposed rule change does not
make any substantive changes to the
current rule other than to make
allocations of FX Options to market
makers permanent. In doing so, the
proposed rule change will strengthen
the Exchange’s foreign currency
products to the benefit of all market
participants. For the foregoing reason,
the Exchange believes the proposed rule
change is non-controversial, does not
raise any new, unique or substantive
issues, and is beneficial for competitive
purposes and to promote a free and
open market for the benefit of investors.
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–ISE–2008–83 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–ISE–2008–83. 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, 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–ISE–
2008–83 and should be submitted on or
before December 11, 2008.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.10
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8–27597 Filed 11–19–08; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–58943; File No. SR–Phlx–
2008–78]
Self-Regulatory Organizations; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change by NASDAQ
OMX PHLX, Inc. Relating to
Temporarily Increasing the Number of
Additional Quarterly Option Series in
Exchange-Traded Fund Options
November 13, 2008.
Pursuant to section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on November
12, 2008, NASDAQ OMX PHLX, Inc.
(‘‘Phlx’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘SEC’’ or ‘‘Commission’’) the proposed
10 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
9 17
PO 00000
CFR 240.19b–4(f)(6).
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70399
Federal Register / Vol. 73, No. 225 / Thursday, November 20, 2008 / Notices
rule change as described in Items I and
II below, which Items have been
prepared by the Exchange. 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, pursuant to Section
19(b)(1) of the Act 3 and Rule 19b–4
thereunder,4 proposes to amend Phlx
Rule 1012, Series of Options Open for
Trading, to temporarily increase the
number of additional Quarterly Option
Series (‘‘QOS’’) in exchange-traded fund
(‘‘ETF’’) options from sixty (60) to one
hundred (100) that may be added by the
Exchange pursuant to Phlx’s QOS pilot
program (the ‘‘Pilot Program’’) 5.
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
This proposed rule change is based on
a recent Chicago Board Options
Exchange, Incorporated (‘‘CBOE’’)
filing.6
The purpose of this proposed rule
change is to temporarily increase the
number of additional QOS in ETF
options from sixty (60) to one hundred
(100) that may be added by the
Exchange. To effect this change, the
Exchange is proposing to add new
subparagraph (h) to Commentary .08 of
its Rule 1012.
Because of the current, unprecedented
market conditions, the Exchange has
received requests from market
participants to add lower priced strikes
for QOS in the Energy Select Sector
SPDR (‘‘XLE’’), the DIAMONDS Trust,
Series 1 (‘‘DIA’’) and the Standard and
Poor’s Depositary Receipts/SPDRs
(‘‘SPY’’). For example, for December
2008 expiration, there is demand for
strikes (a) ranging from $20 up through
and including $40 for XLE, (b) ranging
from $60 up through and including $75
for DIA, and (c) ranging from $74 up
through and including $85 for SPY.
These strikes are much lower than those
ETF
10/27/08
IWM ..................................................................................
QQQQ ..............................................................................
SPY ..................................................................................
DIA ...................................................................................
XLE ..................................................................................
The additional series will enable the
Exchange to list in-demand, lower
priced strikes.
It is expected that other options
exchanges that have adopted the QOS
Pilot Program will submit similar
proposals.7
The Exchange represents that it has
the necessary systems capacity to
support the new options series that will
result from this proposal. Further, as
proposed, the Exchange notes that these
rwilkins on PROD1PC63 with NOTICES
3 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
5 Phlx’s Pilot Program was established in 2007,
see Securities Exchange Act Release No. 55301
(February 15, 2007), 72 FR 8238 (February 23,
2007)(SR–Phlx–2007–08), and extended through
July 10, 2009, see Securities Exchange Act Release
No. 58039 (June 26, 2008), 73 FR 38284 (July 3,
4 17
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18:26 Nov 19, 2008
Jkt 217001
44.86
28.69
83.95
80.26
40.86
10/13/08
currently listed for which there is open
interest.
However, under current Commentary
.08 to Phlx Rule 1012, the Exchange
cannot honor these requests because the
maximum number of additional series,
sixty (60), has already been listed. The
Exchange is therefore seeking to
temporarily increase to one hundred
(100) the number of additional QOS that
may be added. The increase of
additional series would be permitted
immediately for expiration months
currently listed and for expiration
months added throughout the last
quarter of 2008, including the new
expiration month added after December
2008 expiration. The Exchange believes
that this proposal is reasonable and will
allow for more efficient risk
management. The Exchange believes
this proposal will facilitate the
functioning of the Exchange’s market
and will not harm investors or the
public interest.
The Exchange believes that user
demand and the recent downward price
movements in the underlying ETFs
warrant a temporary increase in the
number of strikes for all QOS in ETF
options. Currently, the Exchange list
QOS in five ETF options: (1) iShares
Russell 2000Index Fund (‘‘IWM’’); (2)
Nasdaq-100 Index Tracking Stock
(‘‘QQQQ’’); (3) SPY; (4) DIA; and (5)
XLE. The chart below provides the
historical closing prices of these ETFs
over the past couple of months:
10/6/08
56.98
35.13
101.35
95.03
50.55
9/30/08
59.72
34.86
104.72
99.90
54.89
68.00
38.91
115.99
108.36
63.30
8/29/08
73.87
46.12
128.79
115.45
74.65
7/31/08
71.32
45.46
126.83
113.70
74.40
series would temporarily become part of
the pilot program and will be
considered by the Commission when
the Exchange seeks to renew or make
permanent the Pilot Program in the
future. In addition, the Exchange states
that in the event that current market
volatility continues, it may seek to
continue (through a rule filing) the time
period during which the additional
series proposed by this filing may be
added.
2. Statutory Basis
2008)(SR–Phlx–2008–44). The American Stock
Exchange LLC (‘‘AMEX’’), the Boston Stock
Exchange, Inc. (‘‘BSE’’), the Chicago Board Options
Exchange, Incorporated (‘‘CBOE’’), the International
Stock Exchange LLC (‘‘ISE’’), the Nasdaq Stock
Market LLC (‘‘NOM’’), and NYSEArca, Inc.
(‘‘NYSEArca,’’ formerly the Pacific Stock Exchange,
Inc. or ‘‘PCX’’) have similar pilot programs (the
pilot programs, together with Phlx’s Pilot Program,
are together known as the ‘‘QOS Pilot Programs’’).
6 See Securities Exchange Act Release No. 58887
(October 30, 2008), 73 FR 66083 (November 6,
2008)(SR–CBOE–2008–111).
7 See e.g., Securities Exchange Act Release No.
58926 (November 10, 2008) (SR–ISE–2008–82).
PO 00000
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Because the rule proposal is
responsive to the current,
unprecedented market conditions, is
limited in scope as to QOS in ETF
options and as to time, and because the
additional new series can be added
without presenting capacity problems,
the Exchange believes the rule proposal
is consistent with the Act and the rules
and regulations thereunder applicable to
a national securities exchange and, in
E:\FR\FM\20NON1.SGM
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70400
Federal Register / Vol. 73, No. 225 / Thursday, November 20, 2008 / Notices
particular, the requirements of Section
6(b) of the Act.8 Specifically, the
Exchange believes that the proposed
rule change is consistent with the
Section 6(b)(5) of the Act 9 requirements
that the rules of an exchange be
designed to promote just and equitable
principles of trade, to prevent
fraudulent and manipulative acts and,
in general, to protect investors and the
public interest.
Therefore, the Commission designates
the proposal operative upon filing.
At any time within 60 days of the
filing of such 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.
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.
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:
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 rule does not:
(i) Significantly affect the protection of
investors or the public interest; (ii)
impose any significant burden on
competition; or (iii) become operative
for 30 days from the date on which it
was filed, or such shorter time as the
Commission may designate if consistent
with the protection of investors and the
public interest, the proposed rule
change has become effective pursuant to
Section 19(b)(3)(A) of the Act 10 and
Rule 19b–4(f)(6) thereunder.11
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 because such waiver will enable
the Exchange to better meet customer
demand in light of recent increased
volatility in the marketplace.12
8 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
10 15 U.S.C. 78s(b)(3)(A).
11 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires a self-regulatory organization to
provide the Commission with written notice of its
intent to file the proposed rule change, along with
a brief description and text of the proposed rule
change, at least five business days prior to the date
of filing of the proposed rule change, or such
shorter time as designated by the Commission. The
Commission deems this requirement to be met.
12 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
rwilkins on PROD1PC63 with NOTICES
9 15
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18:26 Nov 19, 2008
Jkt 217001
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–Phlx–2008–78 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–2008–78. 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–Phlx–2008–78 and should be
submitted on or before December 11,
2008.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8–27578 Filed 11–19–08; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–58953; File No. SR–NSX–
2008–20]
Self-Regulatory Organizations;
National Stock Exchange, Inc.; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change To Amend
NSX Rule 11.23(a) Which Defines the
Phrase ‘‘Riskless Principal
Transaction’’
November 14, 2008.
Pursuant to section 19(b)(3)(A) of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on November
13, 2008, National Stock Exchange, Inc.
(‘‘NSX’’ or the ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change, as described in
Items I, II, and III below, which Items
have been prepared by the Exchange.
The Commission is publishing this
notice to solicit comment on the
proposed rule change from interested
persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
NSX Rule 11.23(a), which defines the
phrase ‘‘riskless principal transaction,’’
to make clear that the definition
includes transactions where an ETP
Holder receives orders that may be
executed in whole or in part in other
market venues. As explained in further
detail below, this amendment will
clarify the scope of the exception to
NSX’s Customer Priority rule contained
in Rule 12.6(d), and will more closely
align NSX’s rules with those used by
other self-regulatory organizations
(‘‘SROs’’).
13 17
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
PO 00000
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CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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]]>Agencies
[Federal Register Volume 73, Number 225 (Thursday, November 20, 2008)]
[Notices]
[Pages 70398-70400]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-27578]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-58943; File No. SR-Phlx-2008-78]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by NASDAQ OMX PHLX, Inc. Relating
to Temporarily Increasing the Number of Additional Quarterly Option
Series in Exchange-Traded Fund Options
November 13, 2008.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on November 12, 2008, NASDAQ OMX PHLX, Inc. (``Phlx'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed
[[Page 70399]]
rule change as described in Items I and II below, which Items have been
prepared by the Exchange. 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.
---------------------------------------------------------------------------
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 amend Phlx Rule 1012, Series of
Options Open for Trading, to temporarily increase the number of
additional Quarterly Option Series (``QOS'') in exchange-traded fund
(``ETF'') options from sixty (60) to one hundred (100) that may be
added by the Exchange pursuant to Phlx's QOS pilot program (the ``Pilot
Program'') \5\.
---------------------------------------------------------------------------
\3\ 15 U.S.C. 78s(b)(1).
\4\ 17 CFR 240.19b-4.
\5\ Phlx's Pilot Program was established in 2007, see Securities
Exchange Act Release No. 55301 (February 15, 2007), 72 FR 8238
(February 23, 2007)(SR-Phlx-2007-08), and extended through July 10,
2009, see Securities Exchange Act Release No. 58039 (June 26, 2008),
73 FR 38284 (July 3, 2008)(SR-Phlx-2008-44). The American Stock
Exchange LLC (``AMEX''), the Boston Stock Exchange, Inc. (``BSE''),
the Chicago Board Options Exchange, Incorporated (``CBOE''), the
International Stock Exchange LLC (``ISE''), the Nasdaq Stock Market
LLC (``NOM''), and NYSEArca, Inc. (``NYSEArca,'' formerly the
Pacific Stock Exchange, Inc. or ``PCX'') have similar pilot programs
(the pilot programs, together with Phlx's Pilot Program, are
together known as the ``QOS Pilot Programs'').
---------------------------------------------------------------------------
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
This proposed rule change is based on a recent Chicago Board
Options Exchange, Incorporated (``CBOE'') filing.\6\
---------------------------------------------------------------------------
\6\ See Securities Exchange Act Release No. 58887 (October 30,
2008), 73 FR 66083 (November 6, 2008)(SR-CBOE-2008-111).
---------------------------------------------------------------------------
The purpose of this proposed rule change is to temporarily increase
the number of additional QOS in ETF options from sixty (60) to one
hundred (100) that may be added by the Exchange. To effect this change,
the Exchange is proposing to add new subparagraph (h) to Commentary .08
of its Rule 1012.
Because of the current, unprecedented market conditions, the
Exchange has received requests from market participants to add lower
priced strikes for QOS in the Energy Select Sector SPDR (``XLE''), the
DIAMONDS Trust, Series 1 (``DIA'') and the Standard and Poor's
Depositary Receipts/SPDRs (``SPY''). For example, for December 2008
expiration, there is demand for strikes (a) ranging from $20 up through
and including $40 for XLE, (b) ranging from $60 up through and
including $75 for DIA, and (c) ranging from $74 up through and
including $85 for SPY. These strikes are much lower than those
currently listed for which there is open interest.
However, under current Commentary .08 to Phlx Rule 1012, the
Exchange cannot honor these requests because the maximum number of
additional series, sixty (60), has already been listed. The Exchange is
therefore seeking to temporarily increase to one hundred (100) the
number of additional QOS that may be added. The increase of additional
series would be permitted immediately for expiration months currently
listed and for expiration months added throughout the last quarter of
2008, including the new expiration month added after December 2008
expiration. The Exchange believes that this proposal is reasonable and
will allow for more efficient risk management. The Exchange believes
this proposal will facilitate the functioning of the Exchange's market
and will not harm investors or the public interest.
The Exchange believes that user demand and the recent downward
price movements in the underlying ETFs warrant a temporary increase in
the number of strikes for all QOS in ETF options. Currently, the
Exchange list QOS in five ETF options: (1) iShares Russell 2000Index
Fund (``IWM''); (2) Nasdaq-100 Index Tracking Stock (``QQQQ''); (3)
SPY; (4) DIA; and (5)
XLE. The chart below provides the historical closing prices of these
ETFs over the past couple of months:
----------------------------------------------------------------------------------------------------------------
ETF 10/27/08 10/13/08 10/6/08 9/30/08 8/29/08 7/31/08
----------------------------------------------------------------------------------------------------------------
IWM............................... 44.86 56.98 59.72 68.00 73.87 71.32
QQQQ.............................. 28.69 35.13 34.86 38.91 46.12 45.46
SPY............................... 83.95 101.35 104.72 115.99 128.79 126.83
DIA............................... 80.26 95.03 99.90 108.36 115.45 113.70
XLE............................... 40.86 50.55 54.89 63.30 74.65 74.40
----------------------------------------------------------------------------------------------------------------
The additional series will enable the Exchange to list in-demand,
lower priced strikes.
It is expected that other options exchanges that have adopted the
QOS Pilot Program will submit similar proposals.\7\
---------------------------------------------------------------------------
\7\ See e.g., Securities Exchange Act Release No. 58926
(November 10, 2008) (SR-ISE-2008-82).
---------------------------------------------------------------------------
The Exchange represents that it has the necessary systems capacity
to support the new options series that will result from this proposal.
Further, as proposed, the Exchange notes that these series would
temporarily become part of the pilot program and will be considered by
the Commission when the Exchange seeks to renew or make permanent the
Pilot Program in the future. In addition, the Exchange states that in
the event that current market volatility continues, it may seek to
continue (through a rule filing) the time period during which the
additional series proposed by this filing may be added.
2. Statutory Basis
Because the rule proposal is responsive to the current,
unprecedented market conditions, is limited in scope as to QOS in ETF
options and as to time, and because the additional new series can be
added without presenting capacity problems, the Exchange believes the
rule proposal is consistent with the Act and the rules and regulations
thereunder applicable to a national securities exchange and, in
[[Page 70400]]
particular, the requirements of Section 6(b) of the Act.\8\
Specifically, the Exchange believes that the proposed rule change is
consistent with the Section 6(b)(5) of the Act \9\ requirements that
the rules of an exchange be designed to promote just and equitable
principles of trade, to prevent fraudulent and manipulative acts and,
in general, to protect investors and the public interest.
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\8\ 15 U.S.C. 78f(b).
\9\ 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 rule does not: (i) Significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; or (iii) become operative for 30
days from the date on which it was filed, or such shorter time as the
Commission may designate if consistent with the protection of investors
and the public interest, the proposed rule change has become effective
pursuant to Section 19(b)(3)(A) of the Act \10\ and Rule 19b-4(f)(6)
thereunder.\11\
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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to provide the Commission
with written notice of its intent to file the proposed rule change,
along with a brief description and text of the proposed rule change,
at least five business days prior to the date of filing of the
proposed rule change, or such shorter time as designated by the
Commission. The Commission deems this requirement to be met.
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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 because such waiver
will enable the Exchange to better meet customer demand in light of
recent increased volatility in the marketplace.\12\ Therefore, the
Commission designates the proposal operative upon filing.
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\12\ 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).
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At any time within 60 days of the filing of such 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 No. SR-Phlx-2008-78 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-2008-78. 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-Phlx-2008-78 and should be
submitted on or before December 11, 2008.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-27578 Filed 11-19-08; 8:45 am]
BILLING CODE 8011-01-P
